Thread by @5hoab

My take on Pakistan’s #ExternalDebt. (Thread)

This graph shows the rise of our external debt over the last 10 years. We borrow because we have a big deficit of dollars whereby we are spending more than our earnings so we have to borrow to bridge the gap otherwise we default.

PMLN totally wrecked the economy in their last 3 years & deficits went through the roof. Moreover they artificially maintained dollar rate by pumping borrowed foreign currency into market. You can see the effect on external debt; thus the graph starts to rise steeply from 2015.

When PTI took over, they made major necessary changes; such as letting the dollar rise, decreased imports, increased fuel and energy prices & increased interest rate to decrease the deficit.

It takes time to cut the deficits so they had to do significant borrowing in the first 15 months to bridge the deficit and hence you can see the continued steep rise of external debt in first 15 months of PTI.

Now, deficits have come down significantly & you can see that the line showing the rise of the external debt has plateaued in the last few months. We will have to continue to take more debt until we can reverse our deficits but the rate of increase will be much slower InshaAllah.

Obviously, the people had to pay a significant price with the rise in inflation and slow growth rate. But there was no other way to save Pakistan otherwise our direction was towards a default & we have had to surrender our assets to the creditors; that would have been a disaster.

Now that our economy is stable, the Govt’s focus is stimulating growth, creating jobs & decreasing inflation. Alhamdulillah, the difficult times are now behind us & every next month will be better than the previous one & prosperity is around the corner, inshaAllah.

#NayaPakistan

compile please @threader_app