Pakistan's debt burden has reached alarming levels, with every citizen is now burdened with Rs318,252 debt compared to Rs90,047 a decade ago, according to a new report by the Economic Policy & Business Development (EPBD) — an independent think tank providing strategic advice to policy makers on the economic policies ecosystem.
The report revealed that the country's debt has been rising at an average annual rate of 13%, effectively tripling over the last 10 years. At the current pace, the burden doubles every six years.
Pakistan's total debt now stands at 70.2% of the national economy, a ratio significantly higher than in other countries of the region. The report warned that the trend poses a serious threat to fiscal stability if corrective measures are not adopted swiftly.
It recommended that the government impose strict financial discipline, expand the tax net, and reduce the policy rate from 11% to 9%. A two-percentage point cut, it noted, could lower interest costs on loans by Rs12 trillion, provide fiscal space, and boost business competitiveness.
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