July 05, 2024 (MLN): The total debt of the central government increased by 15.01% YoY to Rs67.82 trillion in May 2024, compared to Rs58.96tr in May 2024, the data released by the State Bank of Pakistan (SBP) showed.

Moreover, on a sequential basis, the central government debt rose by 2.62% MoM compared to Rs66.08tr in April 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 Rs46.21tr, comprising Rs36.6tr long-term debt, Rs9.52tr short-term debt and the remaining Rs86.79bn represented borrowing through Naya Pakistan Certificates.

The figures reported by the central bank for the domestic debt reflect an increase of 24.7% YoY and on a sequential basis growth of 3.88%

By the end of May 2024, the government’s long-term debt surged by 24.14% YoY to Rs36.6tr as compared to Rs29.48tr recorded in the same period a year ago, while increasing 3.91% MoM.

Similarly, the short-term debt rose by 28.09% YoY to Rs9.52tr in the review month.

Within the long-term domestic debt, the Pakistan Investment Bonds (PIBs) accounted for the majority proportion and stood at Rs27.7tr, reflecting an increase of 24.34% YoY and 4.4% MoM.

Meanwhile, in the short-term domestic debt, Market Treasury Bills (MTBs) were the dominant source as borrowing through this security amounted to Rs9.44tr, up by 28.16% YoY and 3.94% MoM.

Borrowing through Naya Pakistan Certificates has decreased by 37.51% YoY to stand at Rs86.79bn in May 2024.

Comparison on a monthly metric shows that in May, the government borrowed 6.42% less through these certificates compared to Rs92.75bn in the previous month.

A breakup of the central government's external debt shows that nearly Rs21.45tr came from long-term loans while Rs155.92bn came from short-term loans.

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Posted on: 2024-07-05T15:05:35+05:00