The Impact of Time and Regime on External Debts of Pakistan : An Empirical Study

The focus of this research is in the area of Financing/Loans acquired by Pakistan over the decades. This study is very important for forecasting the future of Pakistan's financial strength. The data was collected from the State Bank of Pakistan, period from 1949 to 2010. The findings from this research provide the evidence that the external debts are growing in a very fast rate, which will create a great hurdle in coming future for Pakistan. The main conclusions drawn from this research is that the external debts are growing at an average rate of 14.40% per year and also demonstrated that if external debts increase by PKR 1 million in a year, in the next year it will increase by PKR 1.155 million. This research recommends that the outstanding debt can be taken care a special attention when fiscal and monetary policies are made in which external debt repayment should be given high importance along with the strict control over corruption. Government must introduce easy trade policies, which may boost up the exports in order to generate balance of trade, which may help in repaying the external debts