Salman Khan
Salman Khan

ISLAMABAD: Total public debt stood at Rs44,366 billion at the end of March 2022, having ballooned by Rs4,500bn over the first nine months of the outgoing fiscal year, according to the Pakistan Economic Survey 2021-22, released on Thursday.

Of the net Rs4,500bn increase, financing of the federal primary deficit accounted for Rs1,047bn; interest payments consumed Rs2,118bn; currency depreciation accounted for Rs1,744bn; while a Rs409bn decrease in the government’s cash balance accounted for the remaining.

The survey revealed that total external debt had touched $88.8bn (Rs16.29 trillion) by the end of March 2022, having increased by around $2.3bn over the first nine months of the outgoing fiscal year.

The debt stock from multilateral and bilateral sources, mostly contracted on concessional terms (low cost and longer tenor), increased by a net $2.9bn. It may be recalled that, during the period under review, gross inflows of around $1bn were received from the IMF under the Extended Fund Facility, while the International Development Bank provided $0.8bn. Another $3bn was provided by the Saudi government in the form of time deposits.

The debt stock of commercial loans registered a net decrease of around $1.5bn, mainly due to a repayment of loans taken from Chinese commercial banks amounting to $2.3bn. The repayment was done upon maturity of the loans in March 2022, but the government expects the funds to return sometime this month.

The government also raised $2bn through the issuance of international bonds ($1bn through Eurobonds in July 2021 and $1bn through a Sukuk in January 2022). It also repaid $1bn against maturing Sukuk.

The survey reveals that domestic debt had touched Rs28,076bn by end-March 2022, up by Rs1,811bn in the first nine months of the outgoing fiscal.

Interest payments accounted for Rs2,118bn of the net inc­rease of Rs4,500bn in total public debt. The budgeted estimate had been Rs3,060bn. Domestic interest payments were recor­ded at Rs1,897bn and constituted around 90 per cent of total interest servicing, which is mainly attributable to a higher volume of domestic debt in the total public debt portfolio.

Published in Dawn, June 10th, 2022

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