Pakistan's External Debt Dilemma | Center For Global Development
Pakistan’s recent economic history shows why it has been so difficult to service the external debt and why this will continue to be a challenge in the future. First, external debt has not been used to expand public investment for many years now; instead, it has largely supported government consumption. Second, the ability to service the debt has been weakened by poor export performance. And while maintaining external balance has been helped by the growth of remittances, this very growth has also generated pressure on the exchange rate to appreciate, thereby undermining the incentive to expor...
Source: cgdev.org