Pakistan’s public debt crosses dangerous levels and reaches Rs 34 trillion mark

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Pakistan’s public debt crosses dangerous levels and reaches Rs 34 trillion mark

KARACHI: Pakistan’s public debt crosses dangerous levels and reaches Rs 34 trillion mark.

Public debt rose by Rs2.3 trillion in the first nine months of the current fiscal year of 2019/20 as the government’s budget financing needs continue to increase with revenue constraints, the central bank’s data showed on Tuesday.

The State Bank of Pakistan’s (SBP) data showed that public debt stood at Rs34.1 trillion at the end of March 2020, up by 7.4% from Rs31.7 trillion in June-end of 2019.

The government adhered to its commitment of zero borrowings from the central bank and mobilised funds through commercial banks and national savings scheme to finance the budget deficit.

Weaker tax revenues and higher interest payments incurred by the government amid tight monetary policy also led to a surge in domestic debt in the period under review.

The domestic debt was Rs22.4 trillion at the end of March, 8.422% up from Rs20.731 trillion at end-June last year. Foreign debt rose 5.45% to Rs11.658 trillion, according to SBP.

External debt increased in dollar terms on account of fresh borrowing from multilateral and commercial sources and a fall in the rupee value contributed towards a higher foreign debt.