ISLAMABAD -Pakistan’s total public debt hits highest level of history,crossed alarming levels. According to a *Business Recorder *exclusivesourced to a senior official in the Ministry of Finance, borrowing tofinance the fiscal deficit and the rupee depreciation against the dollarwould massively increase Pakistan’s total public debt during the remainingfour-year tenure of the Khan administration. The actual projected additionis being estimated at 4.2 trillion rupees – 3.17 trillion rupees on accountof financing the fiscal deficit and another one trillion rupees due to therupee depreciation.
Total debt stock is projected to rise to 35 trillion rupees in 2020 from 31trillion rupees in 2018-19. Next fiscal year, the government would requirean additional 3.3 trillion rupees – 2.6 trillion rupees to finance thefiscal deficit (a figure that is based on overoptimistic estimates if pastprecedence is anything to go by) with 717 billion rupees for rupeedepreciation and given the penchant of the Governor State Bank of Pakistan(SBP) to over-correct and support an undervalued rupee, this figure too maybe higher than is being estimated. Disturbingly, the impact of a discountrate rise, at present it is an untenable 13.25 percent, has not beenfactored in by the Ministry officials however one would assume that itsimpact on government debt is significant. Projections by the Ministry ofFinance indicate that by 2024 the rise in public debt would be around 10.2trillion rupees, and total debt stock would rise to 45.57 trillion rupees.
Total debt stock in August 2018 when the PTI government took over power was24 trillion rupees as per the SBP website, while it rose to 31.7 trillionrupees by August 2019 – a rise of 30 percent in one year alone. Part of thereason for this rise can be attributed to the flawed policies of theprevious administration given that the primary deficit, which excludesinterest payments, increased to 2.1 percent in 2017-18 from 1.5 percent in2016-17, “indicating a much faster increase in non-interest expenditurecompared to revenue” as per the Economic Survey 2018-19. However,unfortunately, the trend of a rising primary deficit continued during theremaining period of 2018-19, which, no doubt, was the reason behind IMF’sstipulation to contain it to 0.6 percent in the current year as a “prior”condition.
