KARACHI: Pakistan’s external debt and liabilities fell over $3 billion during the first quarter (Jul-Sep) of this fiscal year (FY23) mainly due to massive debt servicing.
The State Bank of Pakistan (SBP) reported on Wednesday that the country’s total external debt and liabilities (outstanding) decreased to $126.914 billion at the end of September 2022 compared to $130.196 billion as on June 30, 2022, showing a decline of $3.282 billion. As a percentage of GDP, total external debt and liabilities also declined from 40 percent in June 2022 to 39 percent in September this year.
Analysts said that although the federal government has made some fresh borrowing from multilateral and bilateral sources on account of public debt, the repayments are more than the borrowing of which the external debt and liabilities are witnessing a declining trend.
Due to massive debt servicing, the official liquid foreign exchange reserve also fell by $1.947 billion during the July-Sep quarter of FY23. SBP’s total liquid reserves fell to $7.987 billion in September 2022 down from $ 9.934 billion in June 2022.
The detailed analysis revealed that public external debt has the highest share of 76 percent in the country’s total external debt and liabilities. However, during the period under review, public external debt plunged by 3 percent or $2.76 billion. Out of total external debt and liabilities, public external debt stood at $97.212 billion in September 2022 compared to $99.972 billion at the end of June 2022.
Sufficient forex stocks available: SBP
During the period under review, IMF debt surged by $695 million to $7.592 billion. Public Sector Enterprises’ (PSEs) debt went down from $8.199 billion to $7.918 billion. Stocks of banks’ borrowing shrunk $222 million to $5.725 billion at the end of the first quarter. Private sector debt increased by $ 32 to $ 11.681 billion in September 2022.
Similarly, debt liabilities to direct investors also declined by $ 52 million to $ 4.377 billion at the end of the first quarter of this fiscal year. The total stocks of debt and liabilities comprise Paris Club, Euro Sukuk global Bond, IMF loan, foreign exchange liabilities, and Public Sector Enterprises (PSE) guaranteed debt and non- guaranteed debt, banks borrowing, non-residential deposits, private sector guaranteed/ non-guaranteed debt and foreign exchange liabilities and debt liabilities to direct investors.
Copyright Business Recorder, 2022
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