Pakistan’s debt servicing soar to $4.3bn in 2QFY22

February 25, 2022 (MLN): Pakistan’s total external debt servicing (principal and interest) by the government reached a total of $4.3bn at the end of 2QFY22, increased by a massive 2.6x compared to 1QFY22, latest data issued by SBP showed.

In the preceding year or FY21 principal and interest payments stood around $13.43bn while in FY20 and FY19 principal and interest payments stood around $14.57bn and $11.59bn respectively.

This indicates that in 3.6years, the government has paid a whopping $43.84bn as principal and interest. Whereas, in five years tenure of PML (N) principal and interest amount stood at $33.363 bn, while in five years tenure of PPP government, principal and interest amount paid was $24.306 bn.

Going by the SBP data, principal amount payments during 2QFY22 totalled $3.47bn, a major chunk of which ($3.15bn) comes from the public debt particularly concentrated under the government debt head. Interest payable on the principal of public debt totalled $675mn. While the interest paid on the principal of total debt totalled $862mn. Furthermore, during Oct-Dec FY22, Pakistan paid $2.8bn and $293mn principal amount on government debt and on IMF loans respectively. Whereas $487mn and $33mn were paid as interest payments on the government’s loan and on loans from IMF.

Meanwhile, it is pertinent to mention that within government external debt, the major chunk of $1.23 (out of $2.8mn) was paid on commercial loans and credits followed by $1bn on Euro/Sukuk global bonds as the principal amount.

Moreover, to meet foreign exchange liabilities, the government paid zero amount as a principal while $155mn retired as interest payments.

Debt servicing of the public sectors enterprises (PSEs) during 2QFY22 reached $31mn, down by 89% QoQ.

Furthermore, the total debt servicing of the private sector (non-guaranteed debt) stood at $480mn in 2QFY22, of which $326mn was retired as principal amount while $154mn were paid as interest.

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