ISLAMABAD – Pakistan’s debt and liabilities have hit the highest level ofits history.
Debts and Liabilites rose to nearly Rs31 trillion at the end of September2018 with an addition of Rs 984 billion in just three months.
According to the statistics issued by the State Bank of Pakistan (SBP)showed that the increase comes amid concerns over a rapid rise in the debtburden in coming months owing to currency depreciation and interest ratehike.
The statistics revealed that by the end of first quarter of the currentfiscal year, the country’s total debt and liabilities soared to Rs30.9trillion. Within a span of just three months, there was an increase ofRs984 billion, or 3.3%, in the overall debt.
Of the Rs30.9 trillion, the gross public debt, which is the directresponsibility of the government, stood at Rs25.8 trillion.
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There was an increase of Rs839 billion in the gross public debt in threemonths, which was far higher than the overall budget deficit of Rs542billion for the period.
One of the key reasons behind the higher debt was the increase in interestrate and devaluation of the rupee during July-September 2018.
A single rupee devaluation adds Rs97 billion to the public debt. Similarly,a 1% increase in interest rate increases the cost of debt servicing byroughly Rs180 billion. This ultimately increases borrowing requirements ofthe finance ministry.
