KARACHI: The government paid $11.55 billion in debt servicing during the fiscal year 2018-19; an increase of over 54 per cent compared to the preceding year, data released by the State Bank of Pakistan (SBP) showed on Monday.

The figures showed government paid $8.654bn as principal amount whereas the remaining $2.933bn was paid as interest. The record-high payments reflect the government’s high-cost borrowings in the last few years.

The government has been continuously borrowing from various sources to meet the gap in the external accounts particularly due to a wide trade deficit.

The country received $5.646bn loan from the International Monetary Fund till June 30, FY19 which pushed up the public external debt to $83.936bn. However, the total external debt and liabilities of the country by end of FY19 were at $106.312bn.

The report also showed that the debt and liabilities increased by $11.075bn to $106.312bn during the period between June 2018 to June this year.

On the other hand, the country’s foreign exchange liabilities doubled to $10.488bn in FY19 from $5.121bn in FY18 whereas under these liabilities, the central bank deposits jumped to $6.2bn in FY19 from $700 million in FY18.

Costly commercial loans also increased substantially during the last fiscal year to $8.47bn against $6.8bn at the end of FY18.

Published in Dawn, August 27th, 2019