Pakistan’s central govt debt soars to Rs62.29 trillion

Pakistan's debt surges

WEB DESK: The latest data released by the State Bank of Pakistan (SBP) reveals a notable 25.94 per cent year-on-year surge in the central government’s total debt, reaching Rs62.291 trillion in September 2023, compared to Rs49.46 trillion in the same month of the previous year.

Conversely, on a month-on-month basis, there was a 2.62 per cent decrease in the central government debt from Rs63.97 trillion in August 2023.

This increase in the debt burden over the past year is primarily attributed to borrowing from both domestic and foreign sources, aimed at covering the fiscal deficit.

According to SBP details, the larger portion of the debt, amounting to Rs39.7 trillion, was domestic.

This reflects a significant growth of 26.2 per cent year-on-year, comprising Rs30.69 trillion in long-term debt and Rs8.88 trillion in short-term debt, while the remaining Rs22.59 trillion was external.

As of September 2023, the government’s long-term debt witnessed a substantial 24.64 per cent year-on-year increase to Rs30.69 trillion compared to Rs24.63 trillion in the corresponding period a year ago.

Similarly, the short-term debt experienced a notable 32.06 per cent year-on-year jump, reaching Rs8.88 trillion as opposed to Rs6.73 trillion in September 2022.

Within the long-term domestic debt category, Pakistan Investment Bonds (PIBs) accounted for Rs22.72 trillion, marking a 24.95 per cent year-on-year increase and a 2.84 per cent month-on-month rise.

In the short-term domestic debt category, market Treasury bills (MTBs) amounted to Rs8.81 trillion, reflecting a 32.01 per cent year-on-year increase.

Borrowing through Naya Pakistan Certificates saw a year-on-year rise of 16.82 per cent, reaching Rs120.7 billion in September 2023.

Breaking down the central government’s external debt, nearly Rs22.55 trillion came from long-term loans, while Rs45.8 billion came from short-term loans.

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