Pakistan’s central govt debt soars to Rs62.48 trillion

Pakistani rupee interbank closing

WEB DESK: The latest data released by the State Bank of Pakistan (SBP) reveals a substantial increase of 24.45 per cent year-on-year in the total debt of the central government, reaching Rs62.48 trillion in October 2023, compared to Rs50.21 trillion in the same period last year.

On a month-on-month basis, the central government’s debt saw a modest uptick of 0.31 per cent, standing at Rs62.29 trillion in September 2023.

This surge in the year-on-year debt burden is primarily attributed to the government’s strategy of borrowing from both domestic and foreign sources to bridge the fiscal deficit.

Breaking down the numbers provided by the SBP, the majority of the debt, amounting to Rs40.41 trillion, was domestic. This signifies a growth of 24.12 per cent year-on-year and 1.79 per cent month-on-month.

Within this domestic debt, long-term debt accounted for Rs31.3 trillion, while short-term debt stood at Rs8.99 trillion. The remaining Rs22.07 trillion was attributed to external sources.

As of October 2023, the government’s long-term debt witnessed a notable increase of 21.81 per cent year-on-year, totaling Rs31.3 trillion, compared to Rs25.69 trillion recorded in the corresponding period a year ago.

The long-term debt also saw a month-on-month rise of 1.95 per cent.

Similarly, short-term debt recorded a significant jump of 32.9 per cent year-on-year and 1.18 per cent month-on-month.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) constituted a substantial portion, amounting to Rs23.07 trillion.

This marked an increase of 19.89 per cent year-on-year and 1.51 per cent month-on-month.

On the other hand, Market Treasury Bills (MTBs) accounted for Rs8.91 trillion in short-term domestic debt, witnessing a surge of 32.83 per cent year-on-year and 1.15 per cent month-on-month.

Borrowing through Naya Pakistan Certificates showed a notable increase of 25.23 per cent year-on-year and 6.69 per cent month-on-month, reaching Rs128.8 billion in October 2023.

A detailed breakdown of the central government’s external debt reveals that nearly Rs22.04 trillion came from long-term loans, while Rs31.8 billion originated from short-term loans.

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