KARACHI : The entire debt of the central government increased by 34.1% at the end of April, according to the State Bank of Pakistan (SBP), reaching Rs58.6 trillion on an annual basis.
The trend is predictable given the government’s increasing reliance on borrowing in the face of a weakening currency and its failure to increase revenue collection through expanding the tax base.
This rise was 2.6 percent month over month, based on the most recent information made public by the central bank on Monday.
While the foreign debt accounted for surpassed the Rs22tr level during the first 10 months of the fiscal year 2022–23, the domestic debt now stands at Rs36.5tr. Meaning that 62.3 percent of debt is domestic and 37.6 percent is foreign, respectively.
The federal government bonds, which represented approximately Rs25 trillion in loans, made up the greatest portion of the domestic debt, according to a thorough analysis of the debt. The other contributions were short-term loans at Rs7.2 trillion and unfunded debt worth Rs2.9 trillion, which included money borrowed via national savings plans.
While the growth in the stock of short-term loans remained at 29.4 percent, the amount of money collected via federal government bonds increased by 31.6 percent from the previous year.
The worrying numbers indicate the country’s protracted balance-of-payments issue at a time when repaying domestic debt has become very difficult as a result of extraordinary interest rate increases and record-high inflation.
