External debt to GDP ratio declines to 20 percent: Secretary Finance

Secretary Finance Dr Waqar Masood Khan on Wednesday told the Senate Standing Committee on Finance that the country's external debt to GDP ratio had come down from 35 percent in 2013 to 20 percent in 2016. He said that by end June, 2016 the total debt of the country was $57.7 billion and the government had also repaid some of its debt later on.
The meeting of the committee was presided over by Senator Saleem H. Mandviwala. The Secretary Finance informed the meeting that the total debt to GDP ratio including internal borrowing, however rose to 64.9 percent from 63 percent in 2013. Regarding China Pakistan Economic Corridor (CPEC), Waqar Masood said that out of total $46 billion, $11.2 billion amount consisted of soft terms loan while the rest of the amount would be owned by the private sector.
About Sukuk bonds and Euro bonds, the secretary informed that in 2014 the government had issued Euro bonds worth of $1 billion on 8.8 percent interest rate. Similarly he said that in September, the government had issued $1 billion more Sukuk bonds on interest rate of 5.5 percent. "The reason for the low mark up rate is that the country's economy had improved significantly during this period," he added.
He said that the government had pledged Islamabad-Lahore Motorway to raise $2 billion through Euro bonds and Sukuk bonds. He informed that the current value of motorway was $2.5 billion, therefore the government could raise $500 million more amount in the coming months. Meanwhile, Secretary Privatization Commission, Ahmed Nawaz Sukhera informed the committee that the government was planning to privatise the SME bank. Chairman of the committee said that it was a good step by the government as the bank was in pathetic condition. Muhammad Zubair, Minister of State for Privatization Commission also attended the meeting.