Charter of the Economy The flotation of Euro/Sukuk bonds and resort to commercial borrowings from international banks, mainly Chinese, are of more recent origin. The share of the latter source is now over 11 percent. The last bond flotation in 2020-21 was in March 2021 of$2.5 billion. The record of external borrowing annually is given in Table 18.4. It reached a peak of almost $20 billion in 2018-19. The total cumulative level of external borrowing since 2012-13 is almost$100 billion. This has been used to the extent of 52 percent for repayment of debt and the remainder largely for financing the current account deficit. Table 18.4: Level of Gross External Borrowing Increase in External Debt 2012-13-4,579 2013-14 4,369 2014-15-108 2015-16 8,785 2016-17 9,532 2017-18 11,760 2018-19 11,112 2019-20 6,446 Source: SBP External Debt Repayment 5,552 6,088 4,237 3,970 6,523 6,076 8,638 11,345 ($ billion) Level of External Borrowing 973 10,457 4,129 12,755 16,055 17,836 19,750 17,791 18.3. Managing the Balance of Payments The two critical areas of the balance of payments are limiting the size of the current account deficit and managing the external debt average tenure in such a way that there is no rapid growth in external debt repayment. The policies for controlling the size of the current account deficit need to simultaneously work on both fronts to regulate the level of imports and promote exports of both goods and services. Econometric analysis of the historical trends of imports in the balance of payments reveals the quantitative impact of key variables as follows: • 1 percent increase in the real GDP leads to a 1.26 percent growth in the volume of imports. • 1 percent increase in the relative price of imports in relation to the domestic price level leads to a 0.20 percent fall in the volume of imports. Similarly, • a 1 percentage point rise in the real interest rate reduces the volume of imports by 1.5 percent. 178