The government borrowed massive amounts of foreign and domestic loans totalling $ 9.7 billion in foreign loans and Rs 6,290.6 billion from domestic banks during the last five years.
The finance Minister Senator Ishaq Dar in a written reply to a question in the National Assembly Friday said the domestic loans have maturity from 3 months to 20 years while foreign loans will be repaid till 2060 depending upon respective loan amortisation schedule.
He explained that the government is making all out efforts to reduce its reliance on loans in future. Senator Ishaq Dar said the government has achieved macroeconomic stability in the last three years through reducing energy shortages, higher revenue collection, widening of tax base, a significant reduction in fiscal deficit and infrastructure development.
He said fiscal consolidation efforts are on track to reduce the reliance on loans since the government has successfully curtailed the fiscal deficit from 8.2% of GDP in 2012-13 to 4.6 percent in 2015-16 due to enhanced revenue mobilisation and prudent expenditure management.
The Finance Minister said fiscal consolidation will continue as the government has made amendments to the Fiscal Responsibility and Debt Limitation Acts by defining the ceiling for the federal government budget deficit at 4 percent of GDP (excluding foreign grants) during the period 2017-18 to 2019-20 and 3.5% of GDP thereafter.
Ishaq Dar said total public debt shall be reduced to 60% of GDP until 2017-18 and thereafter a 15-year transition period has been set towards the reduction of debt to GDP ratio at 50 percent.