Pakistan has witnessed a 16.6% increase in its total debt as the amount owed by the country hit a record high of Rs 24,211 billion in June, according to the provisional figures released by the State Bank of Pakistan.
Borrowings from outside the country were recorded at Rs 7795.7 billion, outpacing the growth in the government’s borrowings from within the country. According to data released by the Bank, external debt increased by 31.7% over the year, compared to a growth of 10.5% in domestic debt.
Compared to a year ago, the government was only able to generate Rs 3,413.3 billion from the issuance of longer-term Pakistan Investment Bonds, compared to Rs 4391.8 billion raised a year ago, a decline of about 22.3%.
Money raised through short-term securities, primarily Market Treasury Bills (MTB) and market treasury bills for the replenishment of cash, grew by 35.7%. Compared to the Rs 6550.9 billion raised by June 2017, the government raised a total of Rs 8,889.1 billion through the sale of these short-term debt securities.
Market expectations that the State Bank would raise interest rates has led investors to restrain from lending money to the government on a long-term basis, which explains the growth in short-term borrowings where the money generated from PIBs has fallen over the year.
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