The debt burden on Pakistan has reached a critical point, with each citizen now owing Rs. 318,252, according to a report by the Economic Policy and Business Development think tank.
The figure marked a threefold increase over the past decade. In 2013, the per capita debt stood at Rs. 90,047. The report added that the debt burden has grown at an average annual rate of 13 per cent. At this pace, the debt doubles every six years.
Pakistan’s total debt was now equivalent to 70.2 per cent of its gross domestic product, a level the report described as significantly worse than that of other countries in the region.
The report advised the government to adopt immediate fiscal discipline and to broaden the tax base. It stressed the need for reducing the policy rate from the current 11 per cent to 9 per cent. A reduction in the policy rate, it argues, would lower the interest cost on loans by Rs. 1.2 trillion.
Such a move, the report stated, would improve the country’s financial capacity and enhance the competitiveness of domestic businesses.
