ISLAMABAD - Pakistan’s public debt has increased by 34 percent in the last one year and reached Rs58.598 trillion by the end of April this year mainly due to the high financing needs, the depreciation of its currency, and rising interest rates.
The country’s public debt has recorded at Rs58.598 trillion by April this year as compared to Rs43.704 trillion in the same month of the previous year showing an increase of 34 percent, according to the latest data of State Bank of Pakistan (SBP). Meanwhile, the public debt has surged by around three percent on a monthly basis to Rs58.598 trillion in April 2023 from Rs57.122 trillion in the preceding month of March.
The breakup of the country’s overall public debt of Rs58.598 trillion showed that the domestic debt stood at Rs36.549 trillion in April, experiencing a year-on-year increase of 21.31 percent. Meanwhile, the foreign debt surged sharply by 49 percent to Rs22.049 trillion in April, compared to Rs14.791 trillion a year ago.
According to officials, other reasons behind the increase in public debt are mainly driven by external debt, which is a result of currency depreciation. The USD/PKR depreciated from 190 to 284 in the last one year.
The country’s debt burden is rapidly increasing because of massive borrowing from the domestic and external resources to finance the fiscal deficit. The federal government for the past one year is facing a serious financial crunch and completely relying on borrowing as revenues and foreign inflows are insufficient to meet the government’s financial needs. Pakistan is still waiting for the release of a $1 billion loan tranche of Extended Fund Facility (EFF) program of the IMF to build its foreign exchange reserves.