ISLAMABAD: The government Friday informed the National; Assembly that Pakistan total debt in September 2020 stood at Rs 36.949 trillion with domestic debt of Rs 23.702 trillion and external debt Rs 13.247 trillion.Finance Ministry presented Debt Policy Statement January 2021 in the National Assembly that covers debt data till September 2020 with increase external debt has increased to US$ 79.906 billion in September 2020 from $78 billion at end June 2020 – long-term debt US$ 78.734 billion and short term debt of US$1.171 billion. The Ministry said that Pakistan external debt was $78 billion on June 2020 and increased by $5.4 billion during the year. Debt from multilateral and bilateral sources increased by US$ 5.6 billion including US$ 1.4 billion under IMF's Rapid Financing Instrument (RFI) facility in order to counter the negative impacts of the outbreak on the economy by increasing social sector spending.
The statement further noted that maturity profile of short term debt less than one year was $12. 241 billion with $7.91 billion long term debt less than one year period $ 3 billion safe Chinese deposit as well as IDB $814 million and local currency securities (T-Bills) $586 billion.
Domestic debt comprises three main categories (i) permanent debt (medium and long- term); (ii) floating debt (short-term); and (iii) unfunded debt (primarily made up of various instruments available under National Savings Schemes). Domestic debt stock was recorded at Rs 23,283 billion at end June 2020, registering an increase of Rs 2,551 billion during fiscal year 2019-20 compared to the increase of Rs 4,315 billion during last year.
Permanent domestic debt in September 2020 stood at Rs 14 929 billion – prize bonds Rs 734 billion, PIBs 13195 billion, Ijara Sukuk Rs 246 billion and Bai-Muajjal of Sukuk Rs 201 billion.
Floating domestic debt Rs 5331 billion – Rs market treasury bonds bill Rs 5332 billion and unfunded debt Rs 3672 billion – Rs defense saving Rs 485 billion, Special Saving Certificates Rs 431 billion, Rs special saving certificates Rs 537 billion, Behbood Saving Certificates Rs 1000 billion, Special Saving Accounts Rs 612 billion, pensioners benefit accounts Rs 353 billion etc.
External public debt stood at $79.906 billion by September 2020 with long term debt over one year $78.734 billion. Long term external debt included: (i) Paris Club$11,203 billion; (ii) multilaterals $39.989 billion; (iii) other bilateral $14.411 billion; (iv) Euro Sukuk Bonds $5.3 billion; (v) commercial loans $7.643 billion, etc. Short term external loans stood at $1.171 billion with $500 million multilateral$546 million local currency securities and $115 million commercial loans credits.
As per debt policy statement, debt from multilateral and bilateral sources increased by US$ 5.6 billion. This amount also includes US$ 1.4 billion under IMF's Rapid Financing Instrument (RFI) facility in order to counter the negative impacts of the outbreak on the economy by increasing social sector spending. The stock of commercial loans/Eurobonds registered a decrease of US$ 1.7 billion; and Non-resident investment in government securities was recorded at US$ 0.7 billion.
Pakistan's external debt is derived from four key sources, with 51 percent coming from multilateral loans, 31 percent from bilateral loans and 18 percent from commercial sources (including Eurobonds/International Sukuk). Multilateral and bilateral sources still cumulatively constitute 82 percent of external public debt portfolio as at end June 2020.
These concessional loans are primarily utilized to remove structural growth anomalies and promote reform in the areas of energy, taxation, business, trade and education.5 (i) Debt Service Suspension Initiative (DSSI). In April 2020, G20 countries extended a time-bound suspension of debt service payments to minimize economic and social damage caused by the pandemic, restore economic growth, maintain market stability and strengthen resilience of developing countries. DSSI was based on the standardized term sheet whereby all relevant bilateral countries agreed to suspend principal and interest payments for a period of 8 months starting from 1st May 2020 till 31st December 2020. The repayment period for this restructuring is four years including one year grace period. Pakistan along with other developing countries availed DSSI. The restructuring amount is provisionally estimated at US$ 1.7 billion. G-20 countries in November 2020 have further extended the suspension period for another 6 months until June 30, 2021. Under this initiative (DSSI-II), the repayment period will be 6 years including one year grace period. Pakistan would be able to defer around US$ 0.8 billion through this arrangement.
Copyright Business Recorder, 2021
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