Official numbers issued by the State Bank of Pakistan (SBP) indicate that Pakistan’s overall debt and liabilities have eclipsed Rs. 50 trillion.
Pakistan’s overall debt and liabilities had reached a new high of Rs. 50.5 trillion by the end of September 2021, which was an increase of Rs. 20.7 trillion over the previous three years and three months. The country’s entire debt has increased by nearly 70 percent, according to the official data.
The incumbent government has added Rs. 16.5 trillion to the country’s public debt so far, which is 165 percent of the debt that was acquired by the previous government in five years.
The national debt had soared to Rs. 41.5 trillion by September this year — an increase of Rs. 16.5 trillion. According to the official report, the total public debt has climbed by 66 percent from July 2018 to September 2021, while the overall public debt since 30 June 2021 has risen to almost 77 percent of the GDP due to additions from the fiscal year 2018-19 to September 2021.
The federal government’s entire domestic debt has risen to Rs. 26.4 trillion, indicating an increase of Rs. 10 trillion (61 percent) since June 2018.
Its external debt has escalated by 77 percent to Rs. 13.8 trillion mainly because of the depreciation of the currency and the accumulation of foreign currency reserves through borrowing. The Rupee-to-Dollar exchange rate was Rs. 170.37 in September
The total external debt and liabilities (that were below $100 billion three years ago) have reached a new high of $127 billion, denoting an increase of $32 billion.
The external public debt, which falls under the jurisdiction of the federal government, rose by $24.4 billion from $75.3 billion in June 2018 to $99.7 billion in September of this year.
In extension, the debt from the International Monetary Debt (IMF) that was $6.1 billion three years ago swelled to $7.1 billion by September 2021. The cost of debt payment has risen dramatically as a direct result of the expanding debt burden as the majority of the loan repayments are being done by signing new loan deals.
Prime Minister Imran Khan had said prior to the central bank’s release of the official debt statistics that “our biggest problem is that we don’t have enough money to run our country due to which we have to borrow loans”.
He highlighted that the rising foreign debt and truncated tax recovery had become a “national security” issue as the government did not have enough funds to spend on people’s welfare.
While his remarks stand corrected, the most straightforward repercussions of the country’s inflating debt pile are putting pressure on the cost of debt servicing, and chances are the next fiscal year may showcase something of a similar but worse nature.