Central government’s debt burden rises by 23% YoY in Mar’20

May 12, 2020 (MLN): The total debt of Central Government during the month of March 2020 stood at Rs. 34.135 trillion, i.e.  2% higher than the figures reported last month. whereas, on a yearly basis, this debt figure was 23% higher compared to Rs 27.79 trillion recorded in March 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. 22.48 trillion during the month, signifying a growth of 24% YoY and 1% 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 March 2020, the government’s long-term debt decreased marginally MoM while on yearly basis, it surged 2.1 times to Rs 16.7 trillion, as it stood at Rs 7.9 trillion at the end of March 2019.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs. 12.25 trillion, and Saving Schemes accounted for Rs. 3.3 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 5.77 trillion during the month under review, depicting a significant decline of 44% YoY and a jump of 9% MoM.

In the short-term, the major portion of the debt was MTBs which amounted to Rs 5.48 trillion, depicting a notable growth of 81% YoY and 9% 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 11.65 trillion, registering an upsurge of 21% YoY and 4% MoM, as it stood at Rs 9.62 trillion at the end of February 2019 and Rs 11.23 trillion in February 2020.

A breakup of the Central Government External Debt shows that nearly Rs. 11.2 trillion came from long-term loans while Rs. 447.5 billion came from short-term loans.

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