Murtaza Syed, a former acting governor of the State Bank of Pakistan (SBP), emphasized the importance of restructuring debt to prevent disorderly defaults in countries. In an article for The Economist, he highlighted the risks associated with unsustainable public debt and the need for innovative solutions to address the issue.
Last year, Syed warned about the dangers of Pakistan’s public debt being unsustainable. The recent agreement with the IMF and other creditors aims to provide relief and financial stability. However, Pakistan is currently facing challenges with foreign exchange and loan repayment.
Syed suggested breaking the taboo surrounding debt restructuring and adopting new approaches to manage debt effectively. He emphasized the impact of debt servicing on development spending and the need for sustainable economic policies.
Despite the recent credit rating upgrade by Moody’s, Pakistan still faces high debt sustainability risks. Syed called for a shift in mindset towards debt restructuring and stressed the importance of government commitment to secure the country’s economic future.
To ensure social stability and development, Syed urged for reforms in the debt restructuring system and greater support from the international community towards debt relief initiatives.
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