Government debt stocks exceed Rs 32 trillion mark in October

The federal government's total debt (domestic and external) stocks continue to surge crossing Rs 32 trillion mark in October 2019, mainly due to high fiscal imbalance.

According to the State Bank of Pakistan (SBP), the federal government's debt stocks recorded an increase of 1.2 percent or Rs 410 billion during the first four months (July-Oct) of current fiscal year. The central government's total debt stocks reached Rs 32.197 trillion in October 2019 compared to Rs 31.787 trillion in June 2019. On a positive note, this increase mainly originated from the rise in government's domestic debt, while external debt observed decline in overall stocks. Analysts said that excessive reliance on domestic resources to finance the fiscal deficit has resulted in increase in the country's debt burden.

The detailed analysis revealed that during the period under review, domestic debt increased by 3.8 percent. With current raise, the federal government's domestic debt rose to Rs 21.537 trillion in October 2019 relative to Rs 20.732 trillion in June 2019, depicting an increase of Rs 805 billion. Domestic debt comprising Rs 13 trillion of permanent debt, Rs 3.379 trillion of unfunded debt and Rs 5.14 trillion of floating debt.

Similarly, the central government's external debt went down by 3.57percent or Rs 395 billion to Rs 10.66 trillion in October 2019 as against Rs 11.055 trillion in June 2019. This includes long term loans amounted to Rs 10.452 trillion and short term loans worth Rs 207 billion.

According to the 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.