Debt servicing soars to $11.8bn in FY20

Published August 27, 2020
The data showed that the government paid $9.543bn as principal for public debt and $2.352bn in interest during FY20. — AFP/File
The data showed that the government paid $9.543bn as principal for public debt and $2.352bn in interest during FY20. — AFP/File

KARACHI: The government paid $11.895 billion in external public debt servicing during 2019-20, data released by the State Bank of Pakistan (SBP) showed on Wednesday.

The amount was 23 per cent higher than $9.645bn paid in 2018-19.

The data showed that the government paid $9.543bn as principal for public debt and $2.352bn in interest during FY20.

The rise in public debt and debt servicing costs could create serious problem as the government has accumulated large debt to improve foreign exchange reserves. However, the sharp decrease in the current account deficit in FY20 and a surplus of $424 million in July FY21 could help strengthen the external account.

The details further showed that the government paid $3.022bn external debt service on public debt in the last quarter of FY20. In addition, it paid additional $559m as interest on it.

The government debt paid to Paris Club Consortium, multilateral, commercial loans, etc was $10.171bn. The remaining $904m were paid to the International Monetary Fund (IMF) and $820m to meet foreign exchange liabilities.

The SBP data also showed that the total principal amount of long-term debt was around $14.578bn which was paid as debt servicing while the interest included in it was $3.233bn.

The long-term debt included the non-guaranteed debt of the public sector enterprises (PSEs), borrowings from scheduled banks, private guaranteed debt, private non-guaranteed debt and private non-guaranteed bonds. Moreover, by the end of FY20, the total public sector external debt stood at $87.885bn while government’s external debt was $70.3bn. The public debt also included $7.68bn of the IMF and $9.9bn of foreign exchange liabilities.

Meanwhile, the total external debt and liabilities rose to $112.8bn in FY20 from $106.3bn in FY19. The total external debt includes $4.9bn of the PSEs, $1.86bn in non-resident deposits and $11.07bn borrowed by the private sector.

Published in Dawn, August 27th, 2020

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Blatant Islamophobia
Updated 30 Jan, 2023

Blatant Islamophobia

Muslim extremists and terrorist outfits are emboldened by hateful acts.
Modern slavery
30 Jan, 2023

Modern slavery

MODERN slavery is a wide-ranging term that can encompass a multitude of scenarios. Common to all of them, however, ...
Remarkable Sania
30 Jan, 2023

Remarkable Sania

BRINGING to a close a career in which she smashed stereotypes, Sania Mirza delivered almost the perfect ending in ...
Losing grip
Updated 29 Jan, 2023

Losing grip

The state and the government are responsible for providing Imran with the security he deserves as a former prime minister.
Telling silence
Updated 29 Jan, 2023

Telling silence

THE silence of the Sindh government over the recent exposé in this paper about Karachi’s water tanker mafia ...
Palestine escalation
29 Jan, 2023

Palestine escalation

THE fire of conflict once again threatens to envelop the land of Palestine, as the growing cycle of violence refuses...