KARACHI: Pakistan’s total debt and liabilities rose 23.36 per cent to Rs40.994 trillion during the second of this fiscal year, up from Rs33.229tr in 2QFY19, reported the State Bank of Pakistan.
However, the debt figure represented a minor decline of 1.26pc over Rs41.516tr in the first quarter of 2019-20.
The year-on-year increase came on the back of rising domestic and external debts, which reflects the growing burden on economy despite some improvement in revenue collections.
External debt, which has been a critical issue for the country, witnessed a jump of around $4 billion to reach $111.047 by the end of second quarter FY20, from $107.059bn. In the first six months of this fiscal year, foreign debt increased by $4.7bn, from $106.3bn in June 2019.
Compared to December 2018, external debt represented an increase of $12bn; a jump of 12.1pc. Despite this, the government has managed to bring down current account deficit to as low as $2.1bn in 1HFY20, from $8.6bn.
The rising foreign debt would require increased servicing, which reached $11.589bn by 2018-19. In 1HFY20, the same amount was recorded at $6.985bn and could possibly jeopardize government’s efforts to reduce trade and current account deficit and increase the foreign exchange reserves cushion.
At the local level, gross domestic debt also jumped 23.61pc to Rs21.676tr by December 2019 end, from Rs17.536tr the year before.
Meanwhile, the gross public debt (sum of government domestic and external plus debt from the IMF) increased by Rs1.004tr to Rs33.711tr by 2019 end, from Rs32.707tr in June of the same year. However, during the second quarter, the same amount fell by Rs520 billion from Rs34.24tr in Sept 2019.
Published in Dawn, February 19th, 2020