Central government debt soars to Rs42.76tr in February

April 05, 2022 (MLN): The total debt of the central government surged to Rs42.76 trillion in February 2022, compared to Rs38.7tr in June, witnessing a surge of Rs4.1tr or 10.5% in 8MFY22, the data released by the State Bank of Pakistan (SBP) showed on Tuesday.

On a sequential basis, the central government debt has moved up by around Rs367 billion, compared to Rs42.4tr recorded in January 2022 while on yearly basis, it posted a surge of Rs6.1tr or 16.7% against Rs36.62tr in February 2021.

The increase in debt burden is primarily attributed to the continuous borrowing from domestic and foreign sources to cover the fiscal deficit.

As per details made available by SBP, the larger portion of the debt was domestic that clocked in at Rs27.7tr, signifying a growth of 11.74% YoY, comprising Rs22.14tr long-term debt and Rs5.52tr short term debt while the remaining was external.

By the end of February 2022, the government’s long-term debt increased by 13.81% YoY when compared to Rs19.45tr recorded in the same period a year ago.

Similarly, the short-term debt inched up by around 4% YoY as opposed to Rs5.32tr in February 2021.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs16.06tr. Meanwhile, in the short-term domestic debt, Market Treasury Bills (MTBs) amounted to Rs5.47tr, up by 2.8% YoY.

Borrowing through Naya Pakistan Schemes witnessed an increase of around 3x to Rs40.7bn as of February 2022, compared to Rs14.6bn in the same month last year.

A breakup of the central government's external debt shows that nearly Rs14.78tr came from long-term loans while Rs272.7bn came from short-term loans.

Copyright Mettis Link News