KARACHI: The federal government’s total debt (domestic and external) surged to Rs 57 trillion by the end of March 2023, the State Bank of Pakistan (SBP) reported on Monday.
According to the SBP, the central government’s total domestic and external debt stocks rose by 19.42 percent during the first nine months of this fiscal year (FY23). Cumulatively, the central government’s total domestic and external debt stocks rose to record level of Rs 57.122 trillion at the end of March 23 compared to Rs 47.832 trillion in June 2022, depicting an increase of Rs 9.29 trillion.
Analysts said that the country’s debt burden is rapidly increasing because of massive borrowing from the domestic and external resources to finance the fiscal deficit. The federal government for the past one year is facing a serious financial crunch and completely relying on borrowing as revenues and foreign inflows are insufficient to meet the government’s financial needs.
Pakistan is still waiting for the release of a $1 billion loan tranche of Extended Fund Facility (EFF) program of the IMF to build its foreign exchange reserves, they added.
During the period under review, the major increase was witnessed in the external debt mainly due to depreciation of Pak Rupee against the dollar. The federal government’s external in rupee terms rose by 32 percent or Rs 5.29 trillion to Rs 22.04 trillion at the end of March 2023 up from Rs 16.747 trillion in June 2022.
The current external debt calculated at Rs 283.75 to the dollar, while the exchange rate in June last year was Rs 204.37. The massive depreciation of Pak rupee to the dollar has largely contributed to the massive surge in external debt.
The federal government’s domestic debt increased by 12.5 percent during the first nine months of this fiscal year. The stocks of domestic dent surged to Rs 35.076 trillion in March 2023 compared to Rs 31.085 trillion in June 2022. Domestic debt included Rs 28.641 trillion of long-term debt and Rs 6.295 trillion of short-term loan.
Copyright Business Recorder, 2023