The debt burden on Pakistan is continuously increasing and its severity has also worried economic experts. According to a new report by Economic Policy and Business Development, currently every Pakistani citizen owes an average of Rs 318,252, while just 10 years ago, the same debt per capita was Rs 90,000.
The report says that debts have increased threefold in the last decade. The debt burden is increasing at a rate of 13 percent annually and this burden doubles after every six years.
Experts have suggested that the policy rate should be reduced from 11 percent to 9 percent to reduce the rising cost of interest on loans. This step can result in significant savings of Rs 1.2 trillion, as well as improve the business environment and increase investment.
The report warns the government that the debt situation is worse than in other countries in the region, as Pakistan’s debt has reached 70.2 percent of the country’s economy. This alarming rate poses a major challenge to economic stability.
Economists have said that if the government does not bring immediate reforms, the economy will face more difficulties in the future. However, with better policymaking and fiscal discipline, it is possible to overcome this crisis and Pakistan can once again move towards development.
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