KARACHI: The country’s external debt servicing has increased significantly in the first two quarters of the current fiscal year, reaching $5.367 billion at the end of Dec 2018.

The State Bank reported on Friday that external debt servicing has been rising sharply compared to the last fiscal year.

The second quarter debt servicing was equal to 71.6 per cent of the total debt servicing ($7.49bn) witnessed in FY18.

The external front of the economy has been facing difficulties despite frequent borrowing from friendly countries. Saudi Arabia has remitted $3bn as per agreement with the country while $1bn also landed into the account of State Bank from the United Arab Emirates.

During Jan 18 to Feb 8, foreign exchange reserves of the State Bank increased by $1.569bn to $8.205bn. However, increased debt servicing could minimise the impact of inflows.

Debt servicing in the second quarter was $2.915bn – higher than the first quarter’s $2.452bn.

If the current pattern persists, the country would have to pay more than $10bn at the end of this fiscal year.

Published in Dawn, February 16th, 2019