Central government debt swells to Rs50tr in October 2022

December 05, 2022 (MLN): The total debt of the central government surged to Rs50.15 trillion in September 2022, compared to Rs47.8tr in June 2022, witnessing an increase of Rs2.36tr or 4.95% in 4MFY23, the data released by the State Bank of Pakistan (SBP) showed on Monday.

On a sequential basis, the central government debt has decreased by around Rs750 billion, compared to Rs49.4tr recorded in September 2022 while on yearly basis, it posted a surge of Rs9.87tr or 24.5% against Rs40.27tr in October 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 Rs32.5tr, signifying a growth of 22.79% YoY, comprising Rs25.7tr long-term debt and Rs6.76tr short-term debt while the remaining was external.

By the end of October 2022, the government’s long-term debt increased by 28.37% YoY when compared to Rs20tr recorded in the same period a year ago.

Similarly, the short-term debt inched up by around 5.4% YoY as opposed to Rs6.4tr in October 2021.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs19.23tr, plunged by 30.4% YoY. Meanwhile, in the short-term domestic debt, Market Treasury Bills (MTBs) amounted to Rs6.7tr, down by 4.58% YoY.

On the other hand, borrowing through Naya Pakistan Certificates has decreased by 7.53% MoM to 48bn as of October 2022, while on yearly basis, the same has increased by 22% compared to Rs39.3bn in October 2021.

A breakup of the central government's external debt shows that nearly Rs17.4tr came from long-term loans while Rs231.3bn came from short-term loans.

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