Debt risks keep economy vulnerable

The fragile external financing system of Pakistan is one of the main reasons for the weak economic structure of the country, as heavy reliance on foreign loans continues to expose the economy to sudden shocks, business leaders and economists said. They added that the external debt profile remains tilted towards short-term borrowing, leaving little room for policy mistakes. "The government must immediately begin serious negotiations with friendly nations to secure longer repayment periods and ease pressure on foreign exchange reserves," said Raja Waseem Hassan, Vice Chairman of the Pakistan Industrial and Traders Associations Front (PIAF). According to Hassan, without extending the maturity of loans, the risk of recurring balance-of-payments stress will continue to haunt the economy.