Central govt debt falls for another month

December 04, 2024 (MLN): The total debt of the central government fell 0.66% to Rs69.11 trillion in October 2024 compared to Rs69.57tr in September 2024, the data released by the State Bank of Pakistan (SBP) showed.

On a yearly basis, the government's debt rose 10.61% compared to Rs62.48tr in October 2023.

The year-on-year 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 and stood at Rs47.23tr, comprising Rs36.97tr long-term debt, Rs10.18tr short-term debt and the remaining Rs75.62bn through Naya Pakistan Certificates.

The figures reported by the central bank for the domestic debt reflect a growth of 16.88% YoY and on a sequential basis a downturn of 0.64%.

By the end of October 2024, the government’s long-term debt rose by 18.15% YoY to Rs36.97tr as compared to Rs31.29tr recorded in the same period a year ago, while increasing 2.06% MoM.

Conversely, the short-term debt rose by 13.27% YoY to Rs10.18tr in the review month.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for the majority proportion and stood at Rs27.76tr, up by 20.37% YoY and 2.35% MoM.

Meanwhile, in the short-term domestic debt, Market Treasury Bills (MTBs) were the dominant source of borrowing, amounting to Rs10.18tr, up by 14.28% YoY, while down by 8.59% MoM.

Borrowing through Naya Pakistan Certificates has declined by 41.29% YoY to stand at Rs75.62bn in October 2024.

Comparison on a monthly metric shows that in October, the government borrowed 10.71% less through these certificates compared to Rs84.7bn in the previous month.

A breakup of the central government's external debt shows that nearly Rs21.59tr came from long-term loans while Rs292.44bn came from short-term loans.

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