Pakistan to continue paying off loans till at least 2060

Author: By Our Special Correspondent

ISLAMABAD: The next two generations of Pakistan will have to pay foreign loans as present and past governments signed such agreements with donors that effectively mean Pakistan will not pay off its loans until 2060. According to documents tabled in parliament, it has been disclosed by the ministry of finance that during the last five years, the government obtained domestic loans of Rs 6,290 billion and $9.7 billion in foreign loans from donors, international financial institutions and banks. The domestic loans have maturity from three months to 20 years while foreign loan are to be repaid till 2060 depending upon the respective loan amortisation schedule.

Sources told Daily Times that governments signed such agreements with international donors that favoured them and due to the terms and conditions, Pakistan will continue repaying loans for the next 44 years. While these loans were obtained in 2011, payment of service charges and mark up on these loans are being paid as well.

The finance ministry claimed that fiscal consolidation was on track to reduce the reliance on loans and this would continue as the government made amendments to the fiscal responsibility and debit limitation act by defining the ceiling for the federal government budget deficit at 4 percent of GDP during the period 2017-18 to 2019-20.

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