Pakistan’s debt rises by 24.45% YoY to Rs62.48tr in October

Domestic debt and liabilities grew by 23.44% year-on-year in October 2023, driven by the issuance of bonds and treasury bills, while the unfunded debt and domestic liabilities declined.

The central government’s total debt increased by nearly a quarter year-on-year to Rs62.48 trillion in October 2023, according to the data released by the State Bank of Pakistan (SBP).

The larger portion of the debt was domestic and stood at Rs40.41 trillion, signifying a growth of 24.12% YoY and 1.79% MoM, comprising Rs31.3 trillion long-term debt and Rs8.99 trillion short-term debt.

The remaining Rs22.07 trillion was external, mostly from long-term loans. The external debt grew by 25.03% YoY and 0.01% MoM.

The year-on-year increase in debt burden is primarily attributed to borrowing from domestic and foreign sources to cover the fiscal deficit.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs23.07 trillion, up by 19.89% YoY and 1.51% MoM.

In the short-term domestic debt, Market Treasury Bills (MTBs) amounted to Rs8.91 trillion, up by 32.83% YoY and 1.15% MoM. Borrowing through Naya Pakistan Certificates has risen by 25.23% YoY and 6.69% MoM to stand at Rs128.8 billion in October 2023.

Domestic debt and liabilities

The government’s total domestic debt and liabilities grew by 23.44% year-on-year in October 2023, reaching Rs41.033 trillion, driven by the issuance of bonds and treasury bills, while the unfunded debt and domestic liabilities declined.

The main drivers of the domestic debt growth were the permanent debt and the floating debt, which rose by 24.22% and 32.9% year-on-year respectively.

The permanent debt, which includes federal government bonds, SBP’s on-lending against SDRs allocation, prize bonds, and market loans, amounted to Rs28.033 trillion. The floating debt, which consists of market treasury bills, reached Rs8.988 trillion.

On the other hand, the government’s unfunded debt and domestic liabilities decreased by 7.42% and 8.85% year-on-year respectively. The unfunded debt, which comprises saving schemes, stood at Rs2.882 trillion.

The domestic liabilities, which include deposits of national savings centers, postal life insurance, and employees’ provident fund, were Rs623.39 billion.

The government also borrowed Rs377.8 billion in foreign currency loans and Rs128.81 billion through Naya Pakistan Certificates in October 2023, showing a significant increase from the same period last year.

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