April 6, 2021 (MLN): The Central Government’s total debt inflated by Rs3.195 trillion or 10% YoY to Rs36. 6 trillion by end-February 2021 as opposed to Rs33.4 trillion recorded in February 2020.
However, on a monthly basis, the central government debt remained flat.
The latest 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 Rs24.78 trillion during the month, signifying a growth of around 12% YoY and 1% MoM, comprising of Rs19.454 trillion long-term debt and Rs5.326 trillion short-term debt.
By the end of February 2021, the government’s long-term debt increased by 15% YoY when compared to Rs16.87 trillion in February 2020, while on monthly basis, it did not witness any change. It was largely because of the government’s decision to convert its short-term borrowing from the central bank to long-term debt to increase the maturity period of debt.
On the other hand, the short-term domestic debt increased by only Rs190 billion or 4% on monthly basis, whereas, on yearly basis it remained stationary, mainly due to the shift of borrowing to long-term instruments.
Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs14.27 trillion, and Saving Schemes accounted for Rs3.526 trillion, showing a jump of 15% and 7% YoY respectively.
The federal government’s short-term domestic debt, acquired through the sale of Market Treasury Bills (MTBs) to commercial banks, increased to Rs5.32 trillion, an addition of 6% YoY and 4% MoM.
The SBP’s debt bulletin further showed that the external debt of the federal government increased from Rs11.23 trillion to Rs11.83 trillion by the end of Feb’21, an addition of Rs599.5 billion or 5% in one year.
A breakup of the Central Government External Debt shows that nearly Rs.11.72 trillion came from long-term loans, depicting a growth of 11% YoY while Rs. 106.9 billion came from short-term loans, which was 84% lower compared to the same month last year.
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