18th August, 2018 to 30th September, 2019: PTI government obtains $10.37 billion debt

A total of $10.37 billion debt was obtained by Pakistan Tehreek-e-Insaf (PTI) government from various countries and international organisations from 18th August 2018 to 30th September 2019.

Gross public debt increased by Rs 9.3 trillion between June 2018 and September 2019, out of which (i) Rs 3.7 trillion (40%) was borrowed for meeting the budget deficit, (ii) Rs 2.6 trillion (28%) was due to currency depreciation and (iii) the remaining increase of Rs 3 trillion (32%) was on account of higher cash balances.

According to documents available with this correspondent, which were placed in the library of the National Assembly in replies to questions of the members of the house during questions hour session on Wednesday, the net increase in public debt after deducting cash balance/deposits was Rs 6.3 trillion. This includes depreciation impact of Rs 2.6 trillion; therefore the actual borrowing of the government during the period to finance the fiscal deficit was Rs 3.7 trillion.

The government during this period obtained a total of $ 1.82 billion bilateral debt from donors: (i) $ 1.54 billion from China, (ii) $ 151.79 million from Saudi Arabia, (iii) $ 68.6 million from France, (iv) $ 0.4 million from Germany, (v) $ 62.48 million from Japan and (vi) $ 0.01 million from Kuwait.

The PTI government has obtained a total of $ 991.2 million loan so far from International Monitory Fund (IMF) during this period.

The government obtained a total $ 2.751 billion from multilaterals including (i) $ 997.45 million from Asian Development Bank (ADB), (ii) $ 23 million Asian Infrastructure Investment Bank (AIIB), (iii) $ 155.04 million from International Bank for Reconstruction and Development (IBRD), (iv) $ 556.05 million from International Development Association (IDA), (v) $ 6.14 million form Islamic Development Bank (IDB), (vi) $922.84 million form IDB (short terms), (vii) $42.24 million from International Fund for Agricultural Development (IFAD), viii) $ 8.36 million from Organization of Petroleum Exporting Countries (OPEC Fund), and (ix) $ 39.8 million form ECOT /BANK.

The government obtained $ 4.805 billion debt from commercial banks including (i) $ 365 million from Ajman Bank, (ii) $ 2.235 billion from consortium of Chinese banks (ICBC, CDB, BOC), (iii) $ 150 million from Citibank, (iv) $ 410 million from DIB/Noor, (v) $ 195 million from DIB, (vi) $ 500 million from Emirates NBD, (vii) $ 300 million from ICBD and (viii) $ 650 million from Credit Suisse.

As part of its commitment to greater fiscal discipline, the government has decided not to borrow directly from State Bank of Pakistan (SBP) with effect from 1st July 2019. In the absence of such borrowing, it is necessary for the government to hold a reasonable amount of cash buffer at all times in order to meet its liquidity needs and smoothly handle short-term cash flow mismatches. The size of cash buffer is expected to be in the range of 2-3 percent of GDP on average but it keeps on fluctuating in line with the liquidity needs.

According to documents, total public debt was Rs 14.292 trillion in financial year 2013, Rs 24.953 trillion in 2018, Rs 32.706 trillion in 2019 and it stood at Rs 34.241 trillion at the end of September 2019. The external debt in financial year 2013 was Rs 4.771 trillion, Rs 8.537 trillion in 2018, Rs 11.976 trillion in 2019 and now in September it stood at Rs 11.591 trillion. The domestic debt was Rs 9.52 trillion in financial year 2013, Rs 16.416 trillion in 2018, Rs 20.73 trillion in 2019 and it stood in September 2019 at Rs 22.65 trillion.

The total public debt was 63.8 percent of GDP in 2013, 72.1 percent of GDP in financial year 2018, 84.8 percent in 2019 and it stood at 78.6 percent of GDP in September 2019. The domestic debt was 42.5 percent of GDP in 2013, 47.4 percent of GDP in 2018, 53.8 percent of GDP in 2019, and it stood at 52 percent of GDP in September 2019, while external debt was 21.3 percent of GDP in 2013, 24.7 percent of GDP in 2018, 31.1 percent of GDP in 2019, and it stood at 26.6 percent of GDP in September 2019.