Scribd Logo
Upload

Welcome to Scribd!

  • 3 views

    Public Debt

    Uploaded by

    Hadia Najeeb
    Economic crisis

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Public Debt

    Uploaded by

    Hadia Najeeb
    3 views8 pages
    Economic crisis

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Economic crisis

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    3 views8 pages

    Public Debt

    Uploaded by

    Hadia Najeeb
    Economic crisis

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 8

    PUBLIC DEBT

    NAME:- EYYAN MUSTAFA


    NAME:- NABEEL MOULA BUX
    INTRODUCTION
    ▪ Debt incurred by the government from different sources to meet its excess
    expenditure is known as public debt. It refers to all types of borrowings made by
    the government

    ▪ According to Tayler, “Government debt arises out of borrowing by the treasury


    from banks, business organisations and individuals.”

    ▪ Almost every country the world started to spend more than the revenue collected
    for their economic development. The short fall of expenditure and revenue is met
    by incurring loans
    TYPES OF PUBLIC DEBT IN PAKISTAN.
    ▪ Pakistan's public debt has two main components:-

    ▪ 1) Domestic debt (which is incurred principally to finance fiscal deficit)

    ▪ 2 External debt (which is raised primarily to finance development expenditure)


    CAUSES OF PUBLIC DEBT IN PAKISTAN
    ▪ Apart from fresh external inflows, revaluation loss on account of depreciation of US Dollar against
    other international currencies as well as depreciation of Pak Rupee against US Dollar contributed
    to this increase.

    ▪ There are various factors that causes to increase public debt.

    These factors include:


    (i) fiscal deficit
    (ii) exchange rate movements
    (iii) change in Government cash balance
    SOLUTION OF PUBLIC DEBT IN PAKISTAN
    Full reserve banking:- proposed to resolve Pakistan’s huge debt servicing problem.
    Pakistan’s huge debt servicing problem can be resolved through full reserve banking,
    which will eliminate high inflation, government debt, and interest cos

    Increase Tax Base: Broaden the tax base and improve tax collection to increase revenue.

    Fiscal Discipline: Implement fiscal discipline by reducing unnecessary expenditures


    and improving budget management.

    Debt Management: Implement a debt management strategy to manage short-term and


    long-term debt.
    GOVT POLICY’S FOR PUBLIC DEBT IN PAK.
    ▪ Government intends to focus on extension of average time to maturity of its
    domestic debt. Addressing the refinancing exposure in domestic debt using more
    medium to longer tenor instruments seems to be more favourable considering the
    lower level of yields of government securities over the medium term.
    IMF LENDING IN ACTION FOR PUBLIC
    DEBT.
    ▪ Then, the country’s government and IMF staff discuss the economic and financial
    situation and financing needs.
    ▪ Typically, a country’s government and the IMF agree on a program of economic policies
    before the IMF lends to the country. In most cases, a country’s commitments to
    undertake certain policy actions, known as policy conditionality, are an integral part of
    IMF lending.
    ▪ Once the terms are agreed upon, the policy program underlying an arrangement is
    presented to the IMF’s Executive Board in a “Letter of Intent” and detailed in a
    “Memorandum of Understanding.” The IMF staff makes a recommendation to the
    Executive Board to endorse the country’s policy intentions and offer financing. This
    process can be expedited under the IMF’s Emergency Financing Mechanism

    ▪ After its Executive Board approves a loan, the IMF monitors how members implement
    the policy actions underpinning it. A country’s return to economic and financial health
    ensures that IMF funds are repaid so that they can be made available to other member
    countries..

    You might also like