Debt Crisis of Pakistan and Its Impact on the Financial System and Economic Growth

Abstract

Debt crisis is mostly occurring in the under developing countries in which one country are not able to pay their internal and external debt because their tax collected revenue is less than their entire expenses or expenditures because in the under developing countries, they raising their capital through the taxation and issuing the treasury bond in the market for the collection of the revenue. When the government utilize the public taxation and enhanced their economic growth in the form of macroeconomic achievement like they financed their running projects and increase their micro and macro-economic value in the form of foreign and demotic goals (cohen1993). When the government are not managing their debt in the authentic way their effect occurs as a bomb for the financial system and economic growth and create a big hurdle for the government and it is very common in the under developing countries.