Pakistan’s central govt debt soars to Rs64.84 trillion

WEB DESK: In a recent report released by the State Bank of Pakistan (SBP), the central government’s total debt has surged by 17.85 per cent year-on-year (YoY) to reach Rs64.84 trillion in January 2023, compared to Rs55.02 trillion in the same period of 2022.

This substantial increase is primarily attributed to borrowing from both domestic and foreign sources to address the fiscal deficit.

However, there is a notable decrease on a sequential basis, with the central government debt dropping by 0.53 per cent month-on-month (MoM) compared to Rs65.19 trillion in December 2022.

Breaking down the figures, the larger portion of the debt is domestic, standing at Rs42.63 trillion.

This comprises Rs34.15 trillion in long-term debt, Rs8.38 trillion in short-term debt, and an additional Rs103.6 billion through Naya Pakistan Certificates.

The State Bank of Pakistan details indicate a significant growth of 24.15 per cent YoY in domestic debt and a marginal sequential increase of 0.09 per cent.

As of January 2023, the government’s long-term debt has risen by 24.11 per cent YoY to Rs34.15 trillion compared to Rs27.51 trillion recorded a year ago, with a minor increase of 0.14 per cent MoM.

Short-term debt also experienced a YoY increase of 25.16 per cent, reaching Rs8.38 trillion in the review month.

Within the long-term domestic debt, Pakistan Investment Bonds (PIBs) constitute the majority, standing at Rs25.6 trillion, up by 22.43 per cent YoY but down by 0.05 per cent MoM.

Market Treasury Bills (MTBs) dominate the short-term domestic debt, amounting to Rs8.29 trillion, showing a YoY increase of 25.16 per cent and a 0.07 per cent MoM rise.

Conversely, borrowing through Naya Pakistan Certificates has seen a decline of 19.7 per cent YoY, reaching Rs103.6 billion in January 2023.

On a monthly comparison, the government borrowed 12.73 per cent less through these certificates compared to the previous month, totaling Rs118.72 billion.

A detailed breakdown of the central government’s external debt reveals that nearly Rs22.14 trillion is sourced from long-term loans, while Rs76.34 billion is obtained from short-term loans.

The fiscal landscape continues to evolve, prompting close monitoring and analysis of these financial trends.

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