First half domestic debt, other liabilities soar to Rs 15.88 trillion

The federal government's domestic debt and other liabilities continued to move up reaching Rs 15.88 trillion at the end of first half (July-Dec) of this fiscal year (FY18). Analysts said the government has taken several steps, in the last budget, to increase the tax revenue aimed at reducing fiscal deficit. However, higher borrowing from domestic banking system reflected that fiscal measures taken by the federal government are not fruitful and the government is still dependent on domestic banking system to meet its financial obligations.
"Despite the government efforts to retain its borrowing from domestic banking system, the stocks of domestic debt and liabilities have reached new high, mainly due to higher fiscal deficit," they added. The State Bank of Pakistan's (SBP) revealed Friday that cumulatively, the federal government's overall stocks of domestic debt and liabilities have posted an increase of 4 percent during first half of this fiscal year. Overall, stocks of domestic debt and liabilities reached Rs 15.889 trillion at the end of December 2017 up from Rs 15.306 trillion in June 2017, depicting an increase of Rs 583 billion.
Year-on-year basis, the stocks of domestic debt and liabilities posted an increase of 9 percent or Rs 1.348 trillion in CY17. The stocks of domestic debt comprised permanent debt, floating debt, unfunded debt and foreign currency loan. The detailed analysis revealed that the federal government's domestic debt continued to rise, while liabilities registered some decline during the period under review.
The federal government's domestic debt rose by 4 percent or Rs 588 billion during the first half of this fiscal year. With current increase, overall stocks of the domestic debt mounted to all-time high of Rs 15.437 trillion as on December 31, 2017 compared to Rs 14.849 trillion on June 30, 2017. During the period under review, the federal government's total domestic liabilities declined by Rs 5.1 billion to Rs 452.2 billion in December 2017.
Category-wise analysis revealed that floating debt is key instrument for federal government to fulfill its financial needs. Stocks of floating debt reached Rs 7.589 trillion, up 16 percent at the end of first half of this fiscal year. Similarly, with an increase of Rs 45 billion, unfunded debt stood at Rs 2.81 trillion. Unfunded debt includes national saving, postal life insurance and GP Fund.
While, permanent debt, which includes market loan, federal government bonds, income tax bonds, prize bonds, etc, posted a decline of 9 percent or Rs 495 billion to Rs 5.03 trillion.