Finance Ministry
The Ministry of Finance has introduced a comprehensive strategy to tackle the significant debt burden that exceeds Rs71 trillion. This plan is part of the government’s broader objective to reduce dependence on external debt while enhancing the country’s capacity to manage debt repayments effectively.
A key component of the strategy is the active pursuit of concessional external financing, which aims to alleviate the pressures associated with existing debt obligations.
By securing loans at favorable terms, the government hopes to create a more manageable repayment structure. Additionally, projects that are currently funded by international loans will be expedited to ensure they are completed on time, thereby maximizing the returns on these investments.
In a bid to encourage domestic savings and minimize reliance on external borrowing, the government plans to enhance national savings schemes. This initiative is expected to motivate citizens to invest in local savings programs, contributing to the country’s financial stability.
To bolster domestic resource mobilization, the government intends to increase its engagement in international financial markets by issuing various types of bonds, including Panda bonds, Eurobonds, and international Sukuk. This approach not only diversifies the funding sources but also positions Pakistan as a competitive player in global finance.
Furthermore, the plan includes initiatives to activate the domestic debt capital market to attract both local and foreign investors.
The government is committed to promoting the establishment of a non-bank financial sector over the coming years, which will encompass pension funds, insurance companies, and asset management firms. This move is aimed at broadening the financial landscape and enhancing investment opportunities within the country.
Structural reforms are also a significant part of the strategy, focusing on expanding the tax base and improving tax collection efficiency. By broadening the tax net, the government hopes to reduce fiscal deficits, thereby enhancing macroeconomic stability and decreasing the need for additional borrowing.
The Ministry of Finance has emphasized the importance of developing a Shariah-compliant debt market, which will cater to the growing demand for ethical investment opportunities.
To manage its debt repayment obligations more effectively, the government plans to extend the maturity profile of both its domestic and external debt portfolio. This approach will provide greater flexibility in repayment schedules.
Additionally, the government will implement a medium-term debt management strategy that aims to establish sustainable practices for managing debt.
This strategic framework is designed to ensure that the government can navigate its financial obligations without compromising economic growth.
In conclusion, the Ministry of Finance believes that the execution of this comprehensive plan will significantly contribute to economic stability, reduce the country’s dependence on external debt, and pave the way for sustainable economic growth in the future.
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