Surge in debt
ISLAMABAD: The State Bank of Pakistan (SBP) reported a massive surge in the government’s total debt by 22.11 percent year-on-year, to Rs61.75 trillion in July 2023, in comparison to Rs50.57 trillion in July 2022.
The debt of the central government increased by 1.49 percent month-on-month when compared to Rs60.84 trillion in June 2023. This rise in debt burden primarily results from borrowing from domestic and foreign sources to cover the fiscal deficit.
A significant portion of the debt (Rs 39 trillion) was accumulated domestically, marking a year-on-year growth of 24 percent. This domestic debt comprised Rs 29.6 trillion in long-term debt and Rs 9.29 trillion in short-term debt. The remaining Rs 22.73 trillion debt consisted of external loans.
As of July 2023, the government’s long-term debt increased by 24.44 percent year-on-year. It amounted to Rs 29.6 trillion compared to Rs23.8 trillion recorded in the same period a year ago.
Similarly, short-term debt saw a 27 percent year-on-year increase, rising from Rs7.3 trillion in July 2022.
Within the long-term domestic debt category, Pakistan Investment Bonds (PIBs) accounted for Rs22.06 trillion, reflecting a 27.4 percent year-on-year increase. Meanwhile, Market Treasury Bills (MTBs) in the short-term domestic debt amounted to Rs 9.22 trillion, up by 27 percent year-on-year.
Borrowing through Naya Pakistan Certificates increased by 26.71 percent year-on-year, reaching Rs139 billion in July 2023. A breakdown of the central government’s external debt reveals that nearly Rs22.67 trillion came from long-term loans, while Rs65.2 billion came from short-term loans.
In the last fiscal year of 2022-23, the country’s total debt and liabilities rose by 29 percent to Rs77.1 trillion. By the end of the last fiscal year, the country’s debt and liabilities, encompassing both domestic and foreign, totaled Rs77.104 trillion, up from Rs59.772 trillion the previous year.
The total debt and liabilities as a percentage of GDP increased to 91.1 percent in 2022-23.
