‘Inevitable’ currency devaluation led to highest external deficit: Hammad
Federal Minister for Economic Affairs Hammad Azhar says the country’s debt to GDP ratio is projected to decline in coming years.
In a series of tweets on Saturday, he said Pakistan’s public debt increased from “72% to 84% of GDP” during the fiscal year 2018-19 as close to half this increase came from devaluation.
“The devaluation became inevitable due to flawed econ[omic] policy of previous govt that led to highest external deficits, depleting forex reserves, highest debt servicing,” the minister said.
“Also,Rs1.2tr of cash reserve was creating by one time debt before moving towards policy of zero borrowing from SBP.”
Hammad Azhar said debt-to-GDP ratio is projected to decline in coming years with currency stabilising and deficit receding.
“Statistically masking or undervaluing actual value of debt by an over-valued exchange rate, artificially kept afloat by depleting forex reserves & more debt is not sustainable,” he added.