Global credit rating agency Moody's Investors Service has predicted that Pakistans external debt will grow to $79 billion (approx. Rs 5 lakh crore) by June, higher than initial estimates, the media reported on Tuesday.
In its latest report on Monday, Moody's said that Pakistan's challenges include a relatively high general government debt burden, weak physical and social infrastructure, a fragile external payments position and high political risk, the Daily Times reported.
By the end of fiscal year 2016-17, Pakistan's external debt will increase to $79 billion out of which the public sector component will be $77.7 billion, the agency said.
The forecast for the outgoing fiscal year is much higher than what was earlier assessed on the basis of data released by the State Bank of Pakistan.
The central bank had shown total external debt and liabilities at $74.2 billion by the end of December 2016. This included $64.5 billion public external debt.
However, Moody's report showed an external debt at $64.4 billion by end of fiscal year 2013. If the debt grows to $79 billion, it means that an additional $14.6 billion in debt has been added in the past four years alone.
Moody's assessed Pakistan's fiscal strength at negative "Very Low", which it said was hindering debt affordability and also increased the debt burden, reports The Daily Times.
The government's debt burden has steadily increased in the past four years from 63.5 per cent of GDP to 66.5 per cent, Moody's said.
Moody's has also projected a higher budget deficit for the outgoing fiscal year.
"We expect that the fiscal deficit will widen further to about 4.7 per cent of GDP in fiscal year 2017 and 5 per cent in FY 2018 despite the government's intention to advance fiscal consolidation," the agency added.