KARACHI: The federal government’s total debt (domestic and external) stocks recorded a decline of 2.6 percent in September 2023 compared to August 2023. Analysts said this is the highest decline since Jan 2011.
After touching an all-time high level of Rs 64 trillion at the end of August 2023, the federal government’s total debt stocks witnessed a downward trend and fell sharply by Rs 1.7 trillion in September 2023.
The State Bank of Pakistan (SBP) on Friday reported that the central government’s total domestic and external debt stocks fell to Rs 62.291 trillion at the end of September 2023 compared to a historic level of Rs 63.9 trillion at the end of August 2023.
50bps hike in policy rate adds Rs300bn to domestic debt: MoF
Analysts at Arif Habib Limited said that the massive decline in the central government debt is primarily due to Pak Rupee appreciation against the US dollar. They said that this is the highest decline since the available data of up to Jan 2011.
Previously, the massive exchange rate volatility and Pak Rupee depreciation against the dollar largely contributed to the debt surge.
The detailed analysis revealed that the major decline was witnessed in the external debt, which fell by 6.5 percent or Rs 1.6 trillion in a month. The federal government’s external debt decreased to Rs 22.593 trillion in September 2023 down from Rs 24.175 trillion in August 2023.
During September 2023, the federal government’s domestic debt stocks also slightly declined by Rs 100 billion to reach Rs 39.7 trillion.
The SBP’s quarterly debt data shows that, cumulatively, the federal government total debt stock surged by 2.3 percent during July-Sep of FY24. The country’s total debt stocks rose to Rs 62.291 trillion in September 2023 compared to Rs 60.841 trillion in June 2023, depicting an increase of Rs 1.45 trillion.
During the quarter under review, a major surge was recorded in the domestic debt, which increased by 1.5 percent or Rs 887 billion. The country’s domestic debt rose to Rs 39.697 trillion in September 2023 as against Rs 38.81 trillion in June 2023. In addition, Pakistan’s external debt mounted up by 2.3 percent or Rs 563 billon to reach Rs 22.953 trillion in September 2023 up from Rs 22.031 trillion in June 2023.
Copyright Business Recorder, 2023
Comments
Comments are closed.