Pakistan’s debt mountain reaches Rs85.84 trillion despite drop in external borrowings

ISLAMABAD: Pakistan’s total debt and liabilities increased to Rs85.84 trillion in the first quarter of the ongoing fiscal year. This shows an increase of 9.46 per cent from Rs78.42 trillion recorded in the same period last year, as per the State Bank of Pakistan (SBP).

Total debt accounted for Rs83.01 trillion, while liabilities stood at Rs4.48 trillion during the period under review. The total debt consists of three components: domestic debt at Rs47.54 trillion, public sector enterprises (PSE) debt at Rs1.75 trillion and external debt at Rs33.72 trillion.

Interestingly, the external debt, which includes borrowings from the International Monetary Fund (IMF), intercompany external debt from foreign investors, and both government and non-governmental external debt, saw a slight decline of 0.68 per cent falling from Rs33.95 trillion in the same quarter last year.

IMF-related debt increased significantly by 13.72 per cent year-on-year and reached Rs2.57 trillion in the first quarter of the ongoing fiscal year.

The SBP report also highlighted that total liabilities (external and domestic) fell by 4.56 per cent YoY to Rs4.48 trillion during the review period.

The consolidated adjustment related to lending to the government amounted to Rs1.66 trillion in the first quarter.

Considering debt and liabilities servicing, the amount dropped by 0.27 per cent YoY to Rs2.12 trillion in the first quarter of FY25 as compared to Rs2.13 trillion in FY24. Rs1.48 trillion went towards interest payments on domestic, PSE, and external debt.

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