Central govt debt rises by 12.7% to Rs69.6tr in July

September 05, 2024 (MLN): The total debt of the central government increased by 12.67% YoY to Rs69.6 trillion in July 2024, compared to Rs61.78tr in July 2023, the data released by the State Bank of Pakistan (SBP) showed.

Moreover, on a sequential basis, the central government debt increased by 1% MoM compared to Rs68.91tr in June 2024.

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 Rs47.7tr, comprising Rs36.97tr long-term debt, Rs10.64tr short-term debt and the remaining Rs88.12bn through Naya Pakistan Certificates.

The figures reported by the central bank for the domestic debt reflect a growth of 22.25% YoY and on a sequential basis an increase of 1.14%

By the end of July 2024, the government’s long-term debt increased by 24.95% YoY to Rs36.97tr as compared to Rs29.59tr recorded in the same period a year ago, while increasing 0.39% MoM.

Similarly, the short-term debt surged by 14.53% YoY to Rs10.64tr in the review month.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for the majority proportion and stood at Rs28.15tr, up by 27.61% YoY and 0.44% MoM.

Meanwhile, in the short-term domestic debt, Market Treasury Bills (MTBs) were the dominant source, as borrowing through this security amounted to Rs10.56tr, up by 14.48% YoY and 3.84% MoM.

Borrowing through Naya Pakistan Certificates has declined by 36.61% YoY to stand at Rs88.12bn in July 2024.

Comparison on a monthly metric shows that in July, the government borrowed 4.79% more through these certificates compared to Rs84.09bn in the previous month.

A breakup of the central government's external debt shows that nearly Rs21.68tr came from long-term loans while Rs229.74bn came from short-term loans.

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