Pakistan government's debt swells to Rs 58.6 lakh crore

The Pakistan government's total debt has increased 34.1 per cent year-on-year to Rs 58.6 trillion at the end of April.

The increase was 2.6 per cent on a month-on-month basis, Dawn reported, quoting State Bank of Pakistan (SBP) data.

The domestic debt amounted to Rs 36.5 lakh crore (62.3%) while the external debt accounted for a 37.6% share with Rs 22 lakh crore at the end of April.


On an annual basis, the increase in external debt remained 49.1%. There was no change in the external debt figure from a month ago.

Within the domestic debt, the largest share was of the federal government bonds that represented almost Rs 25 lakh crore worth of loans.

Other major contributors to the domestic debt were short-term loans (Rs7.2 lakh crore) and unfunded debt (Rs2.9 lakh crore) that included money borrowed through National Savings Schemes.

Funds obtained through federal government bonds rose 31.6% from a year ago while the increase in the stock of short-term loans remained 29.4%.

Along with battling a prolonged balance-of-payments crisis, with foreign exchange reserves covering only a month's import bill, Pakistan's domestic debt servicing is becoming a huge challenge for the country given that interest rate has climbed to an unprecedented level amid record-high inflation.

Pakistan, currently in the throes of a major political as well as economic crisis, is grappling with high external debt, a weak local currency and dwindling foreign exchange reserves.

The inflation level rose by a whopping 36.4 per cent in the year in April, driven mainly by food prices. This is the highest in South Asia, and up from 35.4 per cent in March, according to the country's statistics bureau.

Meanwhile, Pakistan has witnessed a fall of nearly 13 per cent in remittances sent from abroad in the first 10 months of the fiscal year due to the wide gap between the rates of the dollar in interbank and open/gray market.

Financial and exchange company analysts also blame the State Bank and Government for its faulty policies and for influencing the exchange rates which has seen a drop in remittances and even from even foreign companies with investments in Pakistan.

The Pakistan rupee lost more value to the US dollar soon after the market opened on Tuesday.