Central Government debt soars by 9% YoY in May’20

July 14, 2020 (MLN): The total debt of Central Government during the month of May 2020 stood at Rs. 34.489 trillion, i.e.1% percent higher than the figures reported last month. Whereas, on a yearly basis, this debt figure was 9% higher compared to Rs 29.75 trillion recorded in May 2019.

The data released by the State Bank of Pakistan (SBP) shows that the larger portion of the debt was domestic, whereas the remaining was external. The Central Government Domestic Debt amounted to Rs. 23.5 trillion during the month, signifying a growth of 19% YoY and 2% MoM.

Central government’s domestic debt is divided into two broad categories i.e. long-term debt and short-term debt. Long-term debt is further divided into three broad categories namely; Market loans, Federal government bonds and Prize Bonds which collectively termed as permanent debt. By the end of May 2020, the government’s long-term debt increased by 2% MoM while on yearly basis, it surged 2.2 times to Rs 17.46 trillion, as it was Rs 7.94 trillion at the end of May 2019.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs. 12.65 trillion, and Saving Schemes accounted for Rs. 3.5 trillion.

With regards to the government’s short-term debt which comprises of Bai Muajjal, Market Treasury Bills, MTBs for Replenishment of Cash and Outright Sale of MRTS to Banks clocked in at Rs 6 trillion during the month under review, depicting a significant decline of 49% YoY and a jump of 1% MoM.

In the short-term, the major portion of the debt was MTBs which amounted to Rs 5.768 trillion, portraying a growth of 20% YoY and 1% MoM. 

Meanwhile, the Central government’s External debt which excludes IMF loans to Central Bank for BOP support and includes foreign exchange liabilities and IMF loan for budgetary support logged in at Rs 10.97 trillion, registering an upsurge of 10% YoY and a downturn of 2% MoM, as it stood at Rs 9.9 trillion at the end of May 2019 and Rs 11.2 trillion in April 2020.

A breakup of the Central Government External Debt shows that nearly Rs.10.729 trillion came from long-term loans while Rs. 246.2 billion came from short-term loans.

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