Debt to GDP ratio

The Ministry of Finance reportedly acknowledged to the federal cabinet that debt to gross domestic product (GDP) is 70.1 percent and the target set by Fiscal Responsibility and Debt Limitation Act 2005 is unlikely to be achieved which stipulates that "beginning from financial year 2018-19 total public debt shall be reduced to sixty percent of the estimated GDP;" and in the event that this is not achieved "the Minister shall, in accordance with the provisions of this Act, specify the reasons for the federal government's departure from these principles; the approach or measures the federal government intends to take to return to those principles; and the period of time the federal government intends to take to return to those principles." One would hope that the Abbasi administration that has scheduled the presentation of the annual budget on 27 April with only 44 days remaining before the end of its tenure with the end of the fiscal year by 30 June would present a realistic debt policy statement to the National Assembly.
The incumbent government can be squarely held responsible for debt escalation to unprecedented levels in the history of Pakistan. In 2011-12, total interest payments on both the domestic and foreign debt was 791 billion rupees, while repayment of long-term debt for the year was budgeted at 243 billion rupees or a total of 1 trillion rupees. While the PPP-led coalition government was in power till March 2013 yet to define that year as a reflection of PPP's economic policies would be grossly unfair as Ishaq Dar, who took oath in the second week of June 2013 as the country's Finance Minister, incurred loans to eliminate the circular debt to the tune of over 400 billion rupees before the end of that fiscal year.
By 2016-17, the interest on domestic and foreign debt had increased to 1.36 trillion rupees and repayment of foreign loans to 443.8 billion rupees or a total of 1.8 trillion rupees. This implies a percentage rise in servicing and repayment of foreign loans from 2011-12 to 2016-17 by an extremely disturbing 80 percent. In absolute terms, gross domestic debt in 2012 was 7.6 trillion rupees which more than doubled to 15.9 trillion rupees by February 2018, and with four months remaining in the end of the fiscal year, the prognosis is that this would appreciably rise further, or by at least a billion rupees.
External debt was estimated at around 60 billion dollars in March 2013 which is projected to rise to 93 billion dollars by June 2018. The International Monetary Fund, in its first post-programme monitoring report uploaded on its website in March 2018 stated that "risks to public debt sustainability have increased since the completion of the Extended Fund Facility (September 2016). Public and publicly guaranteed debt is expected to remain elevated, marginally declining from 70 percent of GDP in fiscal year 2016-17 to 68 percent of GDP by 2022-23. Alongside, gross fixed financing needs will likely exceed 30 percent of GDP from 2018-19 onward, in part reflecting increased debt service obligations." Again, these are statistics that must be of enormous concern to the PML-N in general going to elections and the economic managers in particular though their approach to date appears to be an ostrich approach in that they simply refuse to acknowledge reality.
To conclude, one can only hope against hope that the budget 2018-19 would be a realistic budget focused on reducing reliance on borrowing through a massive cut in current expenditure and to take measures to raise revenue through reforming the tax system to render it fair, equitable and non-anomalous.