Government plans strategy to pay off Rs71 trillion debt

The cash-strapped country's government has formulated a debt management plan to repay loans by boosting economic and financial activities, according to sources.

The plan aims to address the cash crunch situation and create the capacity to repay loans on time.

It also seeks to reduce the country's dependency on foreign financing in the future by decreasing the trade deficit, which would bring economic stability, as per the sources.

The Ministry of Finance planned to explore ways to obtain concessional external financing, and the projects funded by foreign finance are expected to be completed soon.

As part of the debt management plan, Pakistan will increase the issuance of bonds, including Panda, Euro, and Sukuk bonds in the international market.

Efforts will also be made to secure refinancing at the lowest interest rates to boost the domestic debt market to enhance communication with domestic and foreign investors.

Additionally, there are plans to establish a non-bank sector over the next few years to manage pension funds, insurance, and asset management companies.

Furthermore, the government intends to promote the establishment of a Sharia-compliant loan market in the coming years.

It also plans to improve the maturity profile of the local and external debt portfolio in line with the medium-term debt management strategy.