Manoel, AlvaroRefaqat, SaadiaOnder, HarunAshraf, Mehwish2014-04-172014-04-172012-10https://hdl.handle.net/10986/17877Punjab is Pakistan's most populous and economically vibrant province. Its fiscal health, therefore, is crucial to the fiscal stability and economic development of Pakistan as a whole. By end-June 2011, Punjab's outstanding debt stood at Rs. 413 billion, or 4.0 percent of Gross Subnational Domestic Product (GSDP). The low debt level is perhaps not surprising given the historical barriers to borrowing imposed at the federal level. But this has changed profoundly with enactment of the 18th Constitutional Amendment which has allowed provinces to borrow domestically and externally, subject to limits imposed by National Economic Council (NEC). This change has heightened the need to examine what Punjab owes and the question of provincial debt sustainability in general. As there is no threshold defined for subnational debt levels, this sustainability analysis considers unsustainable fiscal policies and borrowing strategy to be those that lead to an explosive accumulation of debt such that it would jeopardize the normal provision of services by the province. The analysis projects the debt outlook through the fiscal years 2012 to 2021, using the Government of Punjab's current Medium-Term Fiscal Framework (MTFF) as the base. The MTFF for fiscal 2012 anticipates fiscal surpluses in medium term, driven mainly by an improvement in provincial finances due to a favorable Seventh National Finance Commission Award, and thus concludes that the debt outlook is sustainable through fiscal 2021: the debt-to-GSDP ratio gradually declines over the next 10 years, to 1.2 percent, from 4.0 percent; the interest payments-to-revenues ratio decreases to 0.9 percent, from 3.0 percent; while the debt service-to-revenues ratio rises by a modest 0.3 percent to 3.3 percent. The analysis then explores some potential vulnerability to economic and fiscal shocks. Punjab's debt sustainability to be fairly robust to most shocks, except when the individual shocks are combined. However, the probability of combined shock remains very low.en-USCC BY 3.0 IGOACCOUNTINGACCUMULATION OF DEBTAMOUNT OF LOANSARBITRATIONBAILOUTBAILOUTSBALANCE OF PAYMENTSBANK POLICYBANKRUPTCYBENEFICIARIESBONDBOND ISSUEBORROWING STRATEGYBUDGET CONSTRAINTBUDGET CONSTRAINTSCAPITALIZATIONCENTRAL GOVERNMENTCONSTITUTIONAL AMENDMENTCONTINGENT LIABILITIESCONTINGENT LIABILITYCOUNTRY DEBTCREDITORCURRENCYCURRENCY COMPOSITIONDEBTDEBT BURDENDEBT CRISESDEBT LEVELDEBT LEVELSDEBT MANAGEMENTDEBT SERVICEDEBT SERVICESDEBT SERVICINGDEBT SERVICING COSTDEBT STOCKDEBTSDECENTRALIZATIONDEFICITSDEVALUATIONDEVELOPMENT BANKDEVELOPMENT EXPENDITURESDISTRICTDISTRICT GOVERNMENTSDOMESTIC CURRENCYDOMESTIC DEBTECONOMIC DEVELOPMENTECONOMIC GROWTHEXCHANGE RATEEXCHANGE RATESEXPANSIONARY FISCAL POLICIESEXPENDITUREEXPENDITURE PROGRAMSEXPENDITURE PROJECTIONSEXPENDITURESEXTERNAL BORROWINGEXTERNAL DEBTEXTERNAL FINANCINGFEDERAL ADMINISTRATIONSFEDERAL COUNTRIESFEDERAL DEBTFEDERAL GRANTSFEDERAL INTERVENTIONFEDERAL LAWFEDERAL POLICIESFEDERAL REVENUEFEDERAL TRANSFERSFEDERAL-PROVINCIALFINANCESFINANCIAL OBLIGATIONSFISCAL ACCOUNTSFISCAL ADJUSTMENTFISCAL BALANCEFISCAL BALANCESFISCAL CRISISFISCAL DISCIPLINEFISCAL FEDERALISMFISCAL FRAMEWORKFISCAL IMPACTFISCAL PERFORMANCEFISCAL POLICIESFISCAL POLICYFISCAL SPACEFISCAL STABILITYFISCAL SURPLUSESFISCAL SUSTAINABILITYFIXED INTERESTFIXED INTEREST RATESFOREIGN CURRENCYFOREIGN CURRENCY RISKFOREIGN DEBTFOREIGN EXCHANGEFOREIGN LOANFOREIGN LOANSGOVERNMENT ASSETSGOVERNMENT BONDSGOVERNMENT SPENDINGHOLDINGIMMOVABLE PROPERTYINCOME TAXINDEBTEDNESSINFLATIONINFLATION RATEINFLATION RATESINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE FINANCINGINITIAL DEBTINSTITUTIONAL CAPACITYINTEREST INCOMEINTEREST PAYMENTINTEREST PAYMENTSINTEREST RATEINTERGOVERNMENTAL FISCAL RELATIONSINTERGOVERNMENTAL TRANSFERSINTERNATIONAL BANKISSUANCELENDERSLEVEL OF GOVERNMENTLIABILITYLIQUIDATIONLIQUIDITY MANAGEMENTLOANLOAN AMOUNTLOAN PORTFOLIOLONG-TERM MATURITIESMACROECONOMIC ADJUSTMENTMACROECONOMIC FRAMEWORKMACROECONOMIC MANAGEMENTMATURITYMEDIUM TERM FISCAL FRAMEWORKMEDIUM-TERM FISCALMONETARY FUNDMORAL HAZARDMUNICIPALITIESNATIONAL FINANCENATIONAL TREASURYNATURAL DISASTERSNET CURRENT REVENUENET CURRENT REVENUESNET DEBTOUTSTANDING AMOUNTOUTSTANDING DEBTOUTSTANDING LOANOVERDRAFTOVERDRAFT FACILITYPENSIONPENSION FUNDPENSIONSPOLICY ACTIONSPOLICY ADJUSTMENTPOLICY ENVIRONMENTPOLICY INDICATORSPOLICY REPORTPORTFOLIOPOSITIVE DEBTPRICE VALUESPRINCIPAL REPAYMENTSPRIVATIZATIONPROPERTY TAXPROVINCEPROVINCESPROVINCIAL ACCESSPROVINCIAL BORROWINGPROVINCIAL BUDGETPROVINCIAL DEBTPROVINCIAL DEVELOPMENTPROVINCIAL ECONOMIESPROVINCIAL ECONOMYPROVINCIAL EXPENDITUREPROVINCIAL FINANCESPROVINCIAL GOVERNMENTPROVINCIAL GOVERNMENTSPROVINCIAL LEVELPROVINCIAL SHAREPROVINCIAL SHARESPROVINCIAL TAXPUBLIC DEBTPUBLIC FINANCESPUBLIC INVESTMENTREAL INTERESTREAL INTEREST RATERECEIPTSRECURRENT EXPENDITURERECURRENT EXPENDITURESREGULATORY AUTHORITIESRENEGOTIATIONREVENUE SHARINGREVENUE SHARING FORMULASAFETY NETSSHORT-TERM LIQUIDITYSOCIAL WELFARESOLVENCYSTAMP DUTIESSTATE BANKSTATE GOVERNMENTSSTRUCTURAL PROBLEMSSTRUCTURAL REFORMSSUBNATIONALSUBNATIONAL DEBTSUBNATIONAL GOVERNMENTSUBNATIONAL GOVERNMENTSTAXTAX BASETAX BASESTAX COLLECTIONTAX EFFORTTAX POLICYTAX RATETAX RATESTAX REVENUETAX REVENUESTAXATIONTAXISTOTAL DEBTTOTAL EXPENDITURETOTAL EXPENDITURESTOTAL PROVINCIAL REVENUESTOTAL PUBLIC EXPENDITURESTRANCHESTRANSPARENCYTREASURYTREASURY BILLTREASURY BILL RATEVALUATIONWARRANTS10.1596/17877