June 7, 2021 (MLN): The Central Government’s total debt inflated by Rs2.75trillion or 8% YoY to Rs37.08 trillion by end-April 2021 as opposed to Rs34.32trillion recorded in April 2020.
On a monthly basis, the central government debt inched up by 1% MoM.
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 Rs25.34 trillion during the month, signifying a growth of around 10% YoY and a decline of 1% MoM, comprising of Rs19.17 trillion long-term debt and Rs6.15 trillion short-term debt.
By the end of April 2021, the government’s long-term debt increased by 12% YoY when compared to Rs17.12 trillion in April 2020, while on monthly basis, it depicted a decline of 2%. 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 3% on both monthly and yearly basis, mainly due to the shift of borrowing to long-term instruments.
Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for Rs14.024 trillion, and Saving Schemes accounted for Rs3.642 trillion.
The federal government’s short-term domestic debt, acquired through the sale of Market Treasury Bills (MTBs) to commercial banks, increased to Rs6.147 trillion, an addition of 8% YoY and 3% MoM.
The SBP’s debt bulletin further showed that the external debt of the federal government increased from Rs11.2 trillion to Rs11.73 trillion by the end of Apr’21, an addition of Rs512 billion or 5% in one year.
A breakup of the Central Government External Debt shows that nearly Rs.11.16 trillion came from long-term loans, depicting a growth of 6% YoY while Rs.126.7 billion came from short-term loans, which was 58% lower compared to the same month last year.
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