The budget documents and the figures available in Economic Survey of Pakistan for 2008-09, revealed that Pakistan has now trapped into vicious circle of debt repayments as debt liabilities have been exceeding the estimates of total foreign receipts.In the fiscal year 2009-10, the government is expecting a supply of $2.5 billion dollars as loans from donor countries and multilateral agencies, whereas the total allocation for debt repayments and servicing of foreign debt in 2009-10 stands at $2.53 billion dollars. Hence, the government is raising debt to pay debt and the relief impact of the expected foreign loan is difficult to see. ÂAs on June 2009, Pakistan’s external debt liabilities were $50.1 billion, whereas the domestic debt liabilities were estimated at $46.97 billion and the total floating debt, which consists of short term domestic borrowing instruments such as Treasury bills, was estimated at $24 billion dollars. The total outstanding debt is therefore $119.9 billion dollars; roughly 57.6 per cent of the total Gross Domestic Product (GDP).The Prime Minister Advisor on Finance Shaukat Tarin in a post budget press conference gave the break up of the $2.5 billion dollars which the government has been expecting in next fiscal year.According to Tarin, the government has been expecting one billion dollars from USA under the Kerry Lugar bill support, $840 million from International Monitory Fund (IMF), $800 million from World Bank (WB), $600 million from Asian Development Bank (ADB) and $23 million from Islamic Development Bank (IDB). The government also has commitments of $2 billion for FY-1009-10 from the Friends of Democratic Pakistan (FODP) which will raise the estimates of foreign receipts to $4.5 billion. However, the government itself is unsure about the realisation of $2 billion pledges from FODP. The advisor to the PM on Finance is on record as saying that the government will pursue an additional $4 billion loan from the IMF in case payments fail to come through.
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