KARACHI: The federal government’s total debt (domestic and external) stocks increased by Rs 1.641 trillion during the first four months of this fiscal year (FY24), the State Bank of Pakistan (SBP) reported on Tuesday.
According to SBP, the central government’s total domestic and external debt stocks rose by 2.7 percent during Jul-Oct of this fiscal year. With this increase, cumulatively the federal government’s total debt stocks rose to Rs 62.482 trillion by the end of October 2023 compared to Rs 60.841 trillion by the end of June 2023.
Analysts said that the government is forced to borrow from the domestic and external resources to finance the fiscal deficit as the country’s tax revenue collection is insufficient to meet the expenditures. While, in absence of external financing the government is completely dependent on domestic borrowing, of which domestic debt stocks are sharply increasing.
The detailed analysis revealed that, during the period under review, a sharp increase was witnessed in the domestic debt, which rose by 4 percent or Rs 1.599 trillion. The federal government’s domestic debt surged to Rs 40.409 trillion in October 2023 up from Rs 38.810 trillion in June 2023.
The federal government’s domestic debt includes permanent debt Rs 28.033 trillion, unfunded debt Rs 2.881 trillion, foreign currency loan Rs 378 billion and short term loan worth Rs 8.988 trillion by end of October 2023.
During this fiscal year, the federal government’s external debt increased slightly up by Rs 42 billion to Rs 22.073 trillion in October 2023 compared to Rs 22.031 trillion. This comprised Rs 22.041 trillion of long term and Rs 31.8 billion of short term loan.
The exchange rate stability and Pak Rupee appreciation against the dollar has contributed to the lower surge in the external debt stocks. According to State Bank, the US dollar exchange rate was Rs 286.39905 in June 2023 as against Rs 281.5200 in October 2023.
Copyright Business Recorder, 2023