Public debt projected to rise to nearly Rs80 trillion

WEB DESK: Federal Minister for Finance and Revenue, Muhammad Aurangzeb, disclosed to the National Assembly on Friday that as of June 2024, Pakistan’s total debt stands at Rs71.2 trillion.

According to The News, this includes Rs47.3 trillion in domestic debt, accounting for 66 per cent of the total, and Rs24.1 trillion in foreign debt, which constitutes 34 per cent.

The Finance Minister said that the total public debt is expected to reach Rs79.731 trillion by the end of the current fiscal year. This projection includes an anticipated rise of Rs7.671 trillion in domestic loans and Rs818 billion in foreign loans, he added.

In response to a query regarding the specifics of domestic debt, Aurangzeb explained that domestic borrowing is achieved through the issuance of government securities such as T-Bills, Pakistan Investment Bonds, Sukuk, and National Savings Schemes. He added that external debt is primarily sourced from multilateral and bilateral development partners, as well as commercial entities, including bank loans and Eurobonds.

Aurangzeb outlined the government’s strategy to manage the debt burden sustainably through fiscal consolidation, which involves enhancing revenue collection and rationalising expenditures. These measures are anticipated to generate primary surpluses, thereby reducing the necessity for further borrowing, as public debt is largely influenced by fiscal deficits.

The government also aims to implement policies that foster long-term economic growth and ensure the efficient use of borrowed funds.

In a separate response to Shezra Mansab Ali Khan Kharal, Minister for Economic Affairs Ahad Khan Cheema reported that international donors pledged a total of $10.987 billion during the Climate Resilient Pakistan conference held in Geneva on January 9, 2023. Of this amount, $10.44 billion is in loans and $546.49 million is in grants.

Donors include Australia, France, the European Union, South Korea, the USA, the United Kingdom, Denmark, Italy, Germany, Japan, Norway, Canada, China, Saudi Arabia, Vietnam, Azerbaijan, Qatar, and various international financial institutions such as the ADB, AIIB, ISDB, and WB.

Cheema clarified that the Ministry of Economic Affairs is responsible for assessing requirements, programming, and negotiating foreign economic assistance. However, it does not oversee the utilisation and execution of projects.

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