Minister of State for Economic Affairs, Hamad Azhar, has claimed that the government added Rs 1.2 trillion to public debt in the last fiscal year only in a bid to build a cash buffer for timely debt repayments in future after the International Monetary Fund (IMF).
Responding to extreme criticism of the government for adding Rs7.6 trillion to the public debt in one year, Azhar said it was no mystery since Rs3 trillion is the devaluation effect on the old debt stock that the PML-N used to say is a notional number.
“Rs1.2 trillion is used for increasing cash balances of the federal government with banks and remaining external and internal debt is lesser than preceding years” he said in a tweet.
The Rs7.6-trillion increase in public debt is far higher than the estimated budget deficit of nearly 9% of gross domestic product (GDP) even after taking into account the impact of steep currency depreciation on the stock of external public debt.
He also told the media that the increase in public debt was necessary since the Pakistan Investment Bond (PIB) repayments will begin soon and we needed a buffer for system stability at a time when the government was shifting policy from debt rollover to debt repayment.
