Pakistan's debt situation alarming
Tabadlab, an Islamabad-based think tank and advisory firm, has issued a dire warning regarding Pakistan's debt profile, characterizing it as a 'raging fire' that has reached an unsustainable level, as reported by Bloomberg.
This assessment goes beyond the International Monetary Fund's (IMF) previous characterization of the country's debt as "borderline" manageable, as outlined in a comprehensive 68-page report by Tabadlab.
Authored by Zeeshan Salahuddin and Ammar Habib Khan, the report underscores an "alarming" debt profile, foreseeing an "inevitable default" that could trigger a detrimental economic spiral for Pakistan.
Tabadlab's report sheds light on a troubling trend in Pakistan's debt and liabilities. External debt and liabilities have nearly doubled, reaching $125 billion, while domestic debt has surged sixfold in nominal terms since 2011.
According to the advisory firm, interest payments as a percentage of the gross domestic product have hit an all-time high. Tabadlab caters to governments, development institutions, and businesses.
A Gallup poll conducted before Pakistan's contentious election on February 8 reflects a record high in economic pessimism among the country's voters.
The nation faced an economic contraction in the last fiscal year due to widespread floods affecting approximately one-third of the country. These floods resulted in around $30 billion in damages and losses, contributing to the economic challenges currently faced by Pakistan.
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