KARACHI: Pakistan’s external debt and liabilities continued to rise, reaching $ 127 billion by the end of September 2021.

Higher fiscal deficit and deterioration in the current account balance led to higher mobilization of funds from multilateral and commercial sources during the quarter under review.

The State Bank of Pakistan (SBP) Wednesday reported that Pakistan’s external debt and liabilities registered an increase of $4.85 billion during the first quarter of this fiscal year (FY21). The country’s total external debt and liabilities rose to $127.023 billion by end-September 2021 compared to $122.209 billion by June 2021.

However, as percentage of GDP, total external debt and liabilities were almost flat at 40.2 percent in Sept 2021 against 4.3 percent in June 2021. The official foreign exchange reserves increased from $17.441 billion to $19.374 billion during July-Sept of FY22.

The total stocks of debt and liabilities comprise Paris Club, the IMF loan, foreign exchange liabilities, Public Sector Enterprises (PSEs) guaranteed debt and non-guaranteed debt, banks borrowing, non-residential deposits, private sector guaranteed/non-guaranteed debt and foreign exchange and debt liabilities to direct investors.

The detailed analysis revealed that public external debt posted an increase of 4.7 percent or $4.48 to $99.667 billion in September up from $95.177 in June 2021. The banks’ borrowing increased from $5.267 billion in June 2021 to $5.369 billion in September 2021. Private Sector Debt also showed an upward trend and increased by $208 million to reach $11.094 billion by the end of September 2021.

Meanwhile, Pakistan spent some $1.652 billion including $1.21 billion principal and $441 million interest on external debt servicing during the first quarter of this fiscal year.

Copyright Business Recorder, 2021