Government's external debt and liabilities rise by 12% YoY

February 17, 2020 (MLN):  Government’s total external debt and liabilities increased to $111 billion by the end of December 2019, showing an increase of 12% YoY.  This figure was accounted for 39.5% of the total GDP.

On quarterly basis, the total external debt in the last quarter of CY19 increased by a meagre rise of 4% YoY, as during Jul-Sept 2019 it stood at $107 billion which was 38.4% of GDP. The meagre QoQ rise is signifying towards the government’s sound strategy of debt reduction which helped in curtailing excessive borrowings of the past.

At the beginning of the FY20, total external debt stood at $106.3 billion, showing an additional liability of $4.69 billion during 6MFY20.

According to data released by the State Bank of Pakistan (SBP) Public external debt grew by USD 9 billion to USD 87.65 billion. Within Public debt, Government External debt grew by 8% YoY and 5% QoQ to settle at USD 70.984 in December 2019. Loans from IMF rose by $829 million YoY and $379 million QoQ to $6.7 billion at the end of CY19.

More notably, liabilities from foreign exchange which increased throughout during FY19 on account of deposits received by Saudi Arabia, UAE, Qatar as well as loans received from China, has declined on quarterly basis of FY20 by 4% or $424 million to $9.9 billion.  In Jul-Sept FY20, it stood at $10.3 billion.

The detailed analysis of the data revealed that in government’s total external debt, liabilities worth $3.64 billion on yearly basis and $1.94 billion on quarterly basis were added by long-term loans, ending CY19 at $68 billion. Whereas, Short-term debt, which is less than one-year, escalated government’s debt by $ 1.76 billion on yearly basis and $1.23 billion on quarterly basis to reach at $2.8 billion at the end of CY19.

Meanwhile, it is worthwhile to mention that the major component in increasing short-term liabilities on quarterly basis was the mounting debt liabilities in T-bills as it surged by $1.2 billion to $1.56 billion. In Jul-Sept FY20 it stood at $360 million.  

On the other hand, Bank’s external debt and liabilities showed a decline of 6% YoY to $4.5 billion in December 2019, while in the last quarter of 2019 it surged by 3% QoQ from $4.3 billion reported in Jul-Sept 2019.

With regards to liabilities by private sector, which stood at $10.9 billion at the end of CY19 was 9% higher than the figures recorded at the end of CY18. Whereas, on quarterly basis it grew by a margin of $126 million from 10.8 billion during Jul-sept FY20.

Furthermore, additional data posted showed the GDP (Current Market Price) to have increased from $278.8 billion during 1QFY20 to $ 281.4 billion in 2QFY20.

Similarly, Official liquid reserves on quarterly basis in FY20 jumped from $ 8.5 billion to $11.7 billion.

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