That Pakistan's finance is still positive because of the China Pakistan Economic Corridor (CPEC) is both good and bad news. It's good news because the CPEC has helped propel the country's fledgling economy; the bad news is that the country would have been in deep trouble in the absence of CPEC. It is therefore quite alarming to note that the government is going to borrow from international market through issuance of bonds for repayment of already foreign borrowing of US$ 6.5 billion, including commercial loans of $ 858 million, becoming due from February 2017 to June 2018.
The rising debt will test our ability to pay it off without curtailing the spending on development projects. CPEC could help us achieve the target of higher growth rates, increased exports and new job opportunities. But the debt challenge will still be formidable. The debt repayments will have to be made in US dollar. This will require the country to accelerate the pace of exports and home remittances. Don't these two factors constitute a formidable challenge to our policymakers?
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