The federal government’s accumulated debt has surged to nearly Rs60trillion, with the primary cause being extensive borrowing from bothdomestic and foreign sources to address the fiscal deficit.
According to data from the State Bank of Pakistan (SBP), the government’stotal debt has witnessed a substantial year-on-year increase of 22.11%,reaching Rs61.75 trillion in July 2023, compared to Rs50.57 trillion inJuly 2022.
Furthermore, on a month-to-month basis, the government’s debt loadexperienced a 1.49% sequential rise, climbing to Rs60.84 trillion in June2023. This mounting debt burden can predominantly be attributed to thecontinued reliance on borrowing, both domestically and internationally, tooffset the fiscal deficit.
Analyzing the composition of this debt, the central bank’s data indicatesthat a significant portion of it, amounting to Rs39.02 trillion, isdomestically accrued. This figure demonstrates a substantial year-on-yeargrowth of 24.08%. Within this domestic debt, Rs29.59 trillion representslong-term obligations, while Rs9.29 trillion is categorized as short-termdebt. In contrast, the remaining Rs22.73 trillion is external debt.
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By the end of July 2023, the government’s long-term debt saw an impressiveyear-on-year increase of 24.44%, totaling Rs29.59 trillion, compared toRs23.78 trillion recorded during the same period the previous year.Similarly, short-term debt experienced a substantial 27.14% year-on-yearincrease, rising to Rs7.31 trillion in July 2022. These figures illustratethe growing challenges the government faces in managing its debt obligations
