KARACHI: The country’s total debt (domestic and external) stocks reached historical level of Rs 37.99 trillion at the end of May 2021, mainly due to high fiscal imbalance.
The State Bank of Pakistan (SBP) Monday reported that the federal government’s total debt stocks were increased by 8 percent during the first eleven months of last fiscal year (FY21). The central government’s domestic and external debt stocks increased by Rs 2.89 trillion to new peak level of Rs 37.99 trillion in May 2021 compared to Rs 35.107 trillion in June 2020. “Excessive reliance on domestic and external resources for financing of fiscal deficit is increasing the country’s debt burden,” economists said.
During the period under review, the major increase was recorded in the domestic debt, which rose by 12 percent. The federal government’s domestic debt stood at Rs 26.065 trillion in May 2021 up from Rs 23.282 trillion in June 2020, depicting an increase of Rs 2.783 trillion in the first eleven months of last fiscal year. Domestic debt included Rs 19.738 trillion of long term debt and Rs 6.66 trillion of short term debt.
Similarly, the upward trend was also seen in the federal government’s external debt, which went up by 1 percent to Rs 11.932 trillion in May 2021 from Rs 11.825 trillion in June 2020.
According to State Bank the total domestic debt stocks are comprising permanent debt, unfunded debt and floating debt. In addition previously Foreign Exchange Bearer Certificates, Foreign Currency Bearer Certificates, Dollar Bearer Certificates and Special US Dollar Bonds held by the residents, were the part of external debt liabilities but from June-08 & onward it is the part of domestic debt.—RIZWAN BHATTI