Debt pile: Pakistan’s commercial loans register staggering 189pc increase in one year

ISLAMABAD: The debt accumulated through commercial loans by Pakistan in last one year escalated by a shocking 189% or $3.5 billion, reported State Bank of Pakistan

The commercial loans procured by the government rose to $5.3 billion till end of December last year, adding $503 million or 10.4 percent in the first half of FY 2017-18.

Pakistan’s external debt and liabilities exhibited a significant spike by end-December of last year, touching a shocking figure of Rs89 billion, as per data available from State Bank of Pakistan.

The country’s total external debt and liabilities by end of December 2017 were recorded at $88.9 billion, rising 6.9 percent over the course of first half of FY 2017-18. An increase of $13.2 billion was recorded in external debt and liabilities for one year, reported an English daily.

At end of December 2016, Pakistan’s external and debt liabilities stood at $75.7 billion and gross official forex reserves were recorded at $18.6 billion, which dwindled to $12.8 billion.

From this total external debt, the government’s direct obligations are around $70.5 billion, barring public-sector enterprises’ and guaranteed debt.

External debt exhibited a major rise due to issuance of sovereign bonds and obtaining expensive loans from commercial banks. During the first half of FY 2017-18, debt committed via issuance of Eurobonds and Islamic Sukuk surged 52 percent to $7.3 billion.

As per the central bank $3.62 billion was paid for servicing of outstanding stock of external debt in six months and $2.7 billion was spent on principal loans and $988 million interest was paid on outstanding loans.

And the government was unable to get any foreign loan rescheduled during the first six months of FY 2017-18 contrary to last year when it was successfully able to get $1.2 billion of external loans roll-over.