Pakistan’ debt increases by 40% in 15 months

ISLAMABAD: The Ministry of Finance has conceded that Pakistan’s public debt and liabilities have increased by Rs 11.6 trillion or about 40 percent in 15 months.

In its debt policy statement laid before the parliament, the ministry noted that total debt and liabilities that stood at Rs 29.879tr at the end of the fiscal year 2018 crossed Rs 41.489tr at the end of September 2019, showing an increase of Rs11.6tr or 40 percent.

The ministry further added that total debt and liabilities increased by 86.3 percent of GDP at the end of FY 2018 to 94.3 percent of GDP at the end of September 2019.

It said that the government domestic debt that stood at Rs 16.416tr at end-June 2018 increased to Rs 20.73tr by end-June 2019 and reached Rs 22.65tr at end-September 2019.

The finance ministry further conceded that total public debt to GDP ratio reached 72.1 percent while total debt of the government to GDP ratio was 66.5 percent, adding that total public debt and total debt of the government as percentage of GDP stood at 84.8 percent and 76.6 percent, respectively at end June 2019, thus, increasing further during the FY 2018-19.

The debt policy statement stated, “The federal fiscal deficit (excluding grants) was recorded at Rs 3,635 billion or 9.4 percent of GDP during FY 2018-19, thus, remaining higher than the threshold of four percent.”

The statement highlighted that during the 15-month period government’s external debt also increased by 36 percent or Rs 2.8tr to Rs 10.598tr from Rs 7.796tr.

Pakistan’s External Debt and Liabilities (EDL) include all foreign currency debt contracted by the public and private sector, as well as foreign exchange liabilities of the State Bank of Pakistan.

The statement concluded, “EDL was recorded at $106.3 billion by end June 2019, registering an increase of $11.1 billion compared to an increase of $11.8 billion recorded a year earlier.”