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Pakistan’s debt servicing soars to $15bn in FY22

August 16, 2022 (MLN): Pakistan’s external debt servicing (principal and interest) by the government reached a total of $15.1bn at the end of FY22, increasing by 12% YoY compared to FY21, the latest data issued by SBP showed on Monday.

To highlight, the external debt servicing was just $1.653bn in 1QFY22 against $3.51bn in the first quarter of FY21.

However, the debt servicing jumped to $4.36bn in 2QFY22 and further to $4.9bn in 3QFY22. In 4Q of FY22 total external debt servicing stood at $4.2bn.

The increase in debt servicing costs is attributed to higher borrowings to plug the fiscal deficit and massive rupee devaluation during the period which increased the value of external debt.

In 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 4 years, the country has paid a whopping $54.69 bn as principal and interest. During 3.9years tenure, the PTI government has paid a whopping $44.87bn 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 FY22 totaled $12.1bn, a major chunk of which ($11bn) comes from the public debt particularly concentrated under the government debt head ($9.98bn). Interest payable on the principal of public debt totaled $2.3n. While the interest paid on the principal of total debt totaled $2.98bn.

Furthermore, FY22, Pakistan paid $9.99bn and $1bn principal amount on government debt and on IMF loans respectively. Whereas $1.8bn and $140mn 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 $5.1bn was paid on commercial loans and credits followed by $1.6bn on multilateral loans and $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 $330mn retired as interest payments.

Debt servicing of the Public Sectors Enterprises (PSEs) during FY22 reached $278mn, soaring by 3% YoY.

Furthermore, the total debt servicing of the private sector (non-guaranteed debt) stood at $1.45bn in FY22, of which $974mn was retired as principal amount while $482mn was paid as interest.

Copyright Mettis Link News

Posted on:2022-08-16T11:21:55+05:00

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