Domestic debt surges to Rs6.234trn

KARACHI: The country's overall stock of domestic debts surged to Rs 6.23 trillion by the end of October 2011, registering an increase of Rs 217 billion.

The State Bank of Pakistan (SBP) said that the country's overall stocks of domestic debts, comprising permanent debt, floating debt, un-funded debt and foreign currency loan continued to rise during the current fiscal year. The domestic debts registered a growth of 4 percent during first four months (July-Oct) of current fiscal year (FY12). The stock of domestic debts surged by Rs 217.3 billion to new peak level of Rs 6.234 trillion as on Oct 31, 2011 as compared to Rs 6.017 trillion as on June 30, 2011.

Economists said that higher fiscal deficit and rising expenditure of security and subsidies were the chief reasons of expansion in domestic outstanding in initial months of current fiscal year.

Detailed analysis indicated that major increase was witnessed in the domestic debts, while domestic liabilities posted some decline. During the last fiscal year, after a decrease of four percent or Rs 8.7 billion, total government's domestic liabilities had declined to Rs 205.5 billion in October from Rs 214.2 billion in June 2011.

The country's cumulative stock of domestic debts and liabilities posted an increase of three percent, or Rs 208.5 billion, to Rs 6.439.8 trillion at end of October. Previously it stood at Rs 6.231.3 trillion at the end of last fiscal year.

Analysts said that the tremendous rise in debt stock was driven by the healthy growth in the floating debts, which went up by 3 percent during the period under review. Overall floating debts reached Rs 3.331 trillion in October 2011 as against Rs 3.235 trillion in June 2011, depicting an increase of some Rs 96 billion during the first four months of FY12. The floating debt included three months' treasury bills, market treasury bills and MTBs for replenishment of cash.

Permanent debts, which include market loan, federal government bonds, income tax bonds, prize bonds, etc, rose by 6 percent or Rs 63 billion during July-Oct of current fiscal year. With current increase, it surged to Rs 1.187 trillion from Rs 1.124 trillion.

Similarly, with an increase of 3.4 percent or Rs 58.3 billion, unfunded debts, comprising national saving, postal life insurance and GP fund, mounted to Rs 1.714 trillion. Earlier, these stood at Rs 1.655 trillion at the end of fiscal year 2011. Debts under foreign currency loan posted a decline of Rs 0.1 billion to Rs 1.3 billion from Rs 1.4 billion.