Pakistan’s total loans rise to Rs77.1 trillion

ISLAMABAD   -   Pakistan’s total debt and liabilities have skyrocketed to Rs77.1 trillion after adding Rs17.3 trillion in one year mainly due to the devastating impact of currency devaluation.

The total debt and liabilities of the country increased to Rs77.1 trillion, a surge of Rs17.3 trillion, or 29 per­cent, compared to the preceding fis­cal year. In terms of the size of the economy, Pakistan’s total debt and liabilities jumped to 91.1 percent by June this year, which was 89.7 per­cent last year.

The increase in public debt alone, which is the direct responsibility of the government, was Rs13 tril­lion in the past one fiscal year as it swelled to a record Rs60.839 tril­lion by end-June 2023, according to the State Bank of Pakistan (SBP). The breakup of Rs60.839 trillion showed that domestic debt was recorded at Rs38.808 trillion and external debt at Rs22.030 trillion.

The government’s domestic debt increased to Rs38.808 trillion, with an addition of Rs7.723 trillion, or 19.9 percent, in one year. There was an increase of Rs5.142 trillion in long-term debt that jumped to Rs29.330 trillion at a time when in­terest rates were very high. Debt ac­cumulation through long-term bonds rose to Rs25.161 trillion, with an in­crease of Rs5.17 trillion.

However, the debt flow through saving schemes decreased by 12 percent, or Rs391 billion, to Rs2.8 trillion by the end of June this year. The external debt increased at an alarm­ing pace of 21 percent and reached Rs22 tril­lion within one year. There was a net increase of Rs5.283 trillion, largely due to the currency depreciation and building foreign currency re­serves through borrowing.

According to the SBP, Pakistan’s gross exter­nal debt reached $130.296 billion in FY23 com­pared to $130.32 billion in FY22. However, the public external debt was recorded at $94.881 billion in FY23 compared to $99.972 billion in FY22. Pakistan had paid $20.811 billion as external debt servicing in FY23, compared to $15.1 billion in the previous fiscal year. The bifurcation shows that Pakistan paid $16.390 billion as principal amount and $4.420 billion as interest.

Public Sector Enterprises (PESs) domestic debts and liabilities rose by Rs574 billion to Rs2.328 trillion by the end of previous fiscal year as against Rs1.754 billion in the same peri­od of the preceding year. The PSEs debt includes loans from banks while liabilities of such enter­prises reflect borrowings from banks for com­modity finance operations. The debt of PSEs has recorded at Rs1.687 trillion. The domestic debt of Pakistan International Airlines Corpora­tion (PIA) and Water and Power Development Authority (WAPDA) rose to Rs184.5 billion and Rs82.4 billion respectively.