February 25, 2022 (MLN): Pakistan’s external debt and liabilities (outstanding) reached an all-time high of $130.6 billion at the end of 2QFY22, an increase of $13.6bn or 12% YoY, the central bank data showed on Thursday.
The increase is mainly attributable to the higher mobilization of foreign funds to plug fiscal and current account deficits and the accumulation of foreign reserves during the period.
On a sequential basis, the country’s external debt and liabilities jumped by $3.6bn or 3% QoQ during Q2 of FY22 as the amount was $127bn at end of 1QFY22.
According to the SBP, the country’s external debt stocks during 1HFY22 increased by 7% YoY to a new high of $130.6 billion compared to $122.2 billion in FY21.
During the PTI government, foreign debt rose by $35.3bn or 37%, while it was $95bn when the PTI government came into power. During PML(N) tenure, foreign debt soared by $34bn as it was $61bn when it came into power.
According to the latest data issued by the SBP, 78% of the entire debt can be attributed to public external debt, the combination of the government’s long term and short-term external debt, IMF loans to the central bank, and foreign exchange liabilities. The government external debt which includes both long term and short-term external debt stood at $83.9bn during 2QFY22, up by 12% YoY and 4% QoQ, IMF loans to the central bank and federal government standing at $3.36bn and $3.4bn respectively, while foreign exchange liabilities outstanding recorded at $11.64bn during the period under review.
Within the public external debt, the long-term debt by the end of 2QFY22 stood at $82.6bn, up by 12% compared to 2QFY21 and 4% compared to the previous quarter. Short-term debt (less than one year) increased by 40% YoY to $1.27bn compared to the figure recorded at the end of 2QFY21. While it was declined by 1% from $1.28mn at the end of Jul-Sep’21 quarter.
The rest of the amount has been a result of government borrowing from public sector enterprises, banks, and the private sector.
Notably, short-term bank borrowing reached $3bn at the end of Q2 of FY22, showing an increase of 12% QoQ and 39% YoY.
Long-term bank borrowing was recorded at $1mn at the end of Oct-Dec 2021, depicting a decline of 92% YoY and 55% QoQ.
Outstanding external debt of public sector enterprises (PSEs) during 2QFY22 stood at $6.8bn, the figure was 17% and 2% higher when it compared with 2QFY21 and with the previous quarter.
Private sector external debt, which attributed to 10% of the total external debt amounted to $11bn by the end of 2QFY22, remained unchanged YoY while increased by 1% QoQ.
Official liquid reserves increased from $13.56bn in December 2020 to $17.7bn, marking an increase of 31% YoY. On a sequential basis, it was down by 8% in 2Q of FY22 from $19.37bn in 1QFY22.
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