Pakistan-External Debt

Pakistan frequently encounters balance of payments difficulties, requiring emergency funding and rescheduling of debt payments (see table 8, Appendix). The main reason for the negative balance of payments is the chronic trade deficit. However, remittances from Pakistanis employed overseas have compensated for a portion of the trade deficit. Remittances sent home from these workers increased from US$339 million in FY 1976 to US$2.9 billion in FY 1983, when they exceeded total commodity export earnings. After FY 1983, remittances gradually declined, although they averaged US$2.3 billion between FY 1984 and FY 1990. Remittances totaled US$1.8 billion in FY 1991 but then fell to US$1.5 billion in FY 1992, in part because of the disruption caused by the Persian Gulf War. In FY 1992, Pakistanis in the Middle East accounted for 67.1 percent of all remittances; 45.3 percent came from Saudi Arabia alone. Workers in Kuwait provided around 9 percent in the late 1980s, but that proportion fell to 3.6 percent in FY 1992. Pakistanis also send significant remittances from the United States (10.2 percent) and Britain (9.3 percent). (EIU 1992-93, 44; SS, 171, 191)

At the end of June 1993, Pakistani officials estimated the public and publicly guaranteed external debt at US$18.4 billion. The World Bank, however, estimated the total external debt at US$24.1 billion at the end of 1992, up from US$16.7 billion at the end of 1987. Total external debt was 48 percent of the gross national product (GNP--see Glossary). Commercial borrowing is a small proportion of debt; at the end of 1992, it accounted for only 0.4 percent of long-term debt.

Data as of April 1994