Central government debt swells to Rs43tr by March 2022

May 20, 2022 (MLN): The total debt of the central government surged to Rs43 trillion in March 2022, compared to Rs38.7tr in June 2021, witnessing an increase of Rs4.3tr or 11% in 9MFY22, the data released by the State Bank of Pakistan (SBP) showed on Thursday.

On a sequential basis, the central government debt has moved up by around Rs233.4 billion, compared to Rs42.7tr recorded in February 2022 while on yearly basis, it posted a surge of Rs6.15tr or 16.7% against Rs36.84tr in March 2021.

The increase in debt burden is primarily attributed to 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 Rs28tr, signifying a growth of 9.88% YoY, comprising Rs22.79tr long-term debt and Rs5.24tr short term debt while the remaining was external.

By the end of March 2022, the government’s long-term debt increased by 16.71% YoY when compared to Rs19.53tr recorded in the same period a year ago.

Similarly, the short-term debt inched down by around 12.64% YoY as opposed to Rs6tr in March 2021.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs16.52tr. Meanwhile, in the short-term domestic debt, Market Treasury Bills (MTBs) amounted to Rs5.19tr, up by 13.44% YoY.

Borrowing through Naya Pakistan Schemes witnessed an increase of around 2x to Rs37.2bn as of March 2022, compared to Rs18.3bn in the same month last year.

A breakup of the central government's external debt shows that nearly Rs14.65tr came from long-term loans while Rs262.6bn came from short-term loans.

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