The federal government's total debt (domestic and external) stocks rose by Rs 453.4 billion during the first two months of this fiscal year, mainly due to massive borrowing from domestic resources. According to State Bank of Pakistan (SBP), the central government's debt stocks recorded an increase of 1.42 percent reaching Rs 32.240 trillion at the end of August 2019 compared to Rs 31.787 trillion in June 2019.
The detailed analysis revealed that the increase in the central government's debt has mainly originated from the rise in the government's domestic debt, which increased by 3.5 percent. However, external debt moved down due to continued external debt servicing. Analysts said that in the absence of sufficient external financing, excessive reliance on domestic resources for financing of fiscal imbalances is increasing the debt burden. They said that debt stocks are likely to increase further as Pakistan has already obtained a $6 billion of bailout package from the International Monetary Fund.
The SBP reported that the federal government's domestic debt rose to Rs 21.495 trillion in August 2019 relative to Rs 20.732 trillion in June 2019, depicting an increase of Rs 763.5 billion in first two months current fiscal year. Domestic debt comprising Rs 12.567 trillion of permanent debt, Rs 3.188 trillion of unfunded debt and Rs 5.733 trillion of floating debt.
In addition, the government's external debt fell by Rs 310 billion to Rs 10.745 trillion in August 2019 down from Rs 11.055 trillion in June 2019. Year-on-year basis, the central government's total debt increased by 30 percent or Rs 7.508 trillion to Rs 32.240 trillion in August 2019 compared to Rs 24.732 trillion in August 2018.
Copyright Business Recorder, 2019
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