Charter of the Economy Following the change of Government in mid-2018 there was an extended period of deliberation as to whether Pakistan should go back to the IMF or not. Eventually, there were negotiations with the Fund and Pakistan entered yet another IMF program in mid­2019. Table 18.1: Trend in the Balance of Payments Current Account Deficit Financial Account Surplus/ Deficit Other Net Flows 2007-08-14,302 8,310 120 2008-09-9,395 5,936 210 2009-10-3,946 5,097 115 2010-11 214 2,101 177 2011-12-4,658 1,280 103 2012-13-2,496 549-45 2013-14-3,134 5,553 1,439 2014-15-2,815 5,119 342 2015-16-4,961 6,878 735 2016-17-12,278 9,855 477 2017-18-19,195 13,611-577 2018-19-13,434 11,759 171 2019-20-4,449 9,313 435 Source: SBP Balance of Payments Surplus/ Deficit -5,872 -3,249 1,266 2,492 3,275 -1,992 3,858 2,646 2,652 -1,946 -6,141 -1,504 5,299 ($ million) Change IMF in Reserves Reserves ­­2,797 -267 -1,155 2,538 -573 1,949 2,009 102 -86 -376 -745 -5,872 -3,249 4,063 2,225 -1,992 -4,530 3,285 4,595 4,661 -1,844 -6,227 -1,880 4,554 10,680 7,431 11,494 13,719 11,727 7,197 10,509 15,104 19,446 17,550 11,341 9,301 13,724 18.2. Level and Composition of External Debt The process of borrowing to finance current account deficits inevitably leads to an accumulation of external debt. The change in the level and composition of this debt over the last two decades is presented in Table 18.2. The level of external debt and liabilities has risen from$37.9 billion in 1999-2000 to$112.8 billion in 2019-20. This represents an average annual growth rate of 5.5 percent. The GDP has increased in dollar terms annually by 5.9 percent. As such, the long-term trend is some decline in the external debt to the GDP ratio. In fact, it fell sharply from 49 percent in 1999­2000 to 36 percent in 2009-10. However, it had gone back to 45 percent by 2019-20. The level of external debt to GDP ratio is more than twice that of India and Bangladesh. However, it is significantly lower than Sri Lanka where the ratio is 69 percent compared to 39 percent currently in Pakistan. 176