Business & Economy

ISLAMABAD – In a startling revelation that underscores the nation’s escalating economic challenges, a recent report by the Economic Policies and Debt Burden (EPBD) department has calculated that the share of national debt on every citizen of Pakistan has surged to approximately Rs318,252.

The analysis, which factors in the country’s total public debt and divides it by the population, highlights the growing financial burden on ordinary Pakistanis, painting a grim picture of the economy’s fiscal health.

How the Debt Per Citizen is Calculated

The EPBD’s figure is derived from a straightforward but alarming formula:

• Total Public Debt: The combined federal and provincial government debt, which has ballooned in recent years due to high fiscal deficits, currency devaluation, and extensive borrowing.
• Divided by Population: Based on Pakistan’s estimated population of over 240 million, the per-capita debt is calculated.

This amount represents the theoretical financial liability assigned to every man, woman, and child in the country if the government were to settle all its debts immediately.

A Sharp Increase in Personal Liability

The report indicates a dramatic increase in this per-capita debt burden. Compared to figures from just two years ago, the debt per person has jumped by over 50%. This rapid ascent is attributed to several key factors:

• Rapid Currency Depreciation: The significant devaluation of the Pakistani Rupee against the US Dollar has drastically increased the local currency value of external debts.
• High Fiscal Deficit: The government’s consistent spending over and above its revenue earnings necessitates borrowing, adding to the debt stockpile.
• Mounting Interest Payments: A large portion of the annual budget is now allocated to servicing existing debt (interest payments), leaving fewer resources for critical public spending on health, education, and development.

Economic Analysts Sound the Alarm

Financial experts have reacted to the EPBD report with deep concern. They warn that this soaring debt burden is not just a statistic but has real-world consequences for every citizen.

“When the government’s resources are funneled into debt servicing, it directly impacts the common man,” explained Dr. Ali Khan, a senior economist. “It means less money for building schools, improving hospitals, and subsidizing utilities. This leads to higher inflation, increased taxes, and stunted economic growth, creating a vicious cycle of poverty and debt.“

The report suggests that without stringent fiscal discipline, economic reforms, and a boost in exports, the per-capita debt figure is likely to continue its upward trajectory.

What Does This Mean for the Average Pakistani?

While an individual citizen is not directly liable to pay this amount, the implications are profound:

• Higher Taxes: To generate revenue for debt repayment, the government may be forced to impose new taxes or increase existing ones.
• Inflation: Printing money to finance the deficit or higher indirect taxes can fuel inflation, reducing the purchasing power of households.
• Reduced Public Services:
• Economic Instability: A high debt burden makes the country vulnerable to external shocks and can undermine investor confidence.

The EPBD report serves as a critical wake-up call, emphasizing the urgent need for sustainable economic policies to avert a full-blown debt crisis.

Faiz.tv will continue to monitor this developing economic story. Stay tuned for further analysis and updates.