Public debt up by Rs14.9tr during the current government
ISLAMABAD: Pakistan’s total public debt has increased by 14.9 trillion rupees under the current government, from 24.953 billion rupees at the end of fiscal 2018 to 39.859 billion rupees through June 30, 2021.
“The total public debt has increased by 3.4 trillion rupees in the last fiscal year, from 36.399 trillion rupees in June 2020 to 39.859 trillion rupees until the end of June 2021. The federal primary deficit (surplus ) 967 rupees billion rupees, the interest payment of 2.7 trillion rupees and the depreciation of the exchange rate (rupee against the US dollar) contributed 665 billion rupees to the increase in the public debt burden total during fiscal year 2021 ”, the annual debt review and the public debt bulletin for fiscal year 2020-21 prepared by the Ministry of Finance. The department’s debt management wing said Tuesday.
The Fiscal Responsibility and Debt Limitation Act 2005 (FRDL) defines “total public debt” as government debt (including federal and provincial governments) serviced by consolidated funds and debts owed to the government. International Monetary Fund. However, it does not include total liabilities. Total public debt and liabilities stood at 29.8 trillion rupees at the end of fiscal 2018, which jumped to 47.8 trillion rupees through September 2021, so that it jumped by 18 trillion rupees under exemption from the current government.
During the PMLN rule from 2013 to 2018, the total public debt and liabilities increased from Rs 14 trillion to Rs 29 trillion, so in five years, it increased by nearly Rs 15 trillion. Under the PPP government, total public debt and liabilities increased from Rs 6 trillion to Rs 14 trillion from 2008 to 2013 and jumped by Rs 8 trillion. But the PTI has inflated public debt and liabilities at supersonic speed and has increased by Rs 18 trillion in just three years.
“This perpetual increase in the debt burden shows that the total public debt and liabilities are increasing at supersonic speed and heading for a completely dire situation,” said an independent economist.
Domestic debt stood at Rs 26,265 billion and external debt at Rs 13,594 billion until the end of June 2021. Total public debt in US dollars stood at US $ 253 billion using an exchange rate of 157.3 rupees against the US dollar. Now the exchange rate has plunged and stood at Rs 173 against the US dollar. On the total public debt, the share of the domestic debt amounts to 66% while the external debt oscillates around 34%. The rupee component’s share of total government debt is 66%, the US dollar 18%, IMF special drawing rights (SDRs) 11%, Japanese yen 2% and other currencies at 3%. The total domestic debt was Rs 26,265 billion, of which the permanent debt is Rs 15,911 billion, the floating debt Rs 6.68 billion and the unfunded debt of Rs 3,764 billion.
Total external debt was recorded at $ 86.4 billion at the end of June 2021, with the government’s external debt standing at $ 79.031 billion and the IMF’s debt at $ 7.384 billion. Pakistan’s external debt comes from four main sources, with around 48 percent multilateral lending, 30 percent bilateral lending, 13 percent commercial lending, and 9 percent Eurobonds / sukuk at the end of June 2021. commercial sources have relatively increased in recent years, multilateral and bilateral sources still represent a total of 78% of the external public debt portfolio at the end of June 2021.
The official public debt report said the government stayed within the fixed benchmarks of risk indicators during the 2020-2021 fiscal year. However, few annual targets set for 2020-2021 for debt risk indicators were slightly missed, mainly for the following reasons, including a higher than expected federal budget deficit; less sukuk issuance than expected due to unavailability of assets; net withdrawal of NSS shares mainly due to the encashment of price obligations; non-materialization of the proceeds of the envisaged privatization; liquidation of the existing external public debt portfolio and slightly higher mobilization from commercial sources (foreign commercial banks / Eurobonds); and the need to build up the cash-buffer in anticipation of future deadlines.
The total guaranteed stock stood at $ 12.3 billion in June 2019 and climbed to $ 15.3 billion until the end of June 2021. The power sector remained the largest beneficiary of the stock of guarantees. government because out of a total of $ 15.3 billion in inventories, guarantees for the electricity sector amounted to $ 12.7 billion, aviation $ 1.3 billion, finances $ 0.4 billion, manufacturing $ 0.3 billion, oil and gas $ 0.3 billion and other $ 0.2 billion.