May 22, 2021 (MLN): Pakistan’s External Debt and Liabilities reached nearly $116.39 billion during Jan-March FY21, an increase of $6.27bn or 6% YoY, the Central Bank data showed on Friday.

However, as a percent of GDP, Pakistan’s External debt and Liabilities declined from 43.9% of GDP in 3QFY20 to 38% of GDP in 3QFY21.

According to the latest data issued by the State Bank of Pakistan (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 Central Bank, and Foreign Exchange Liabilities.  The Government external debt which includes both long term and short-term external debt stood at $73.97bn during 3QFY21, up by 6% YoY, IMF loans to Central Bank and Federal government standing at $4.2bn and $3.4bn respectively, while Foreign exchange liabilities outstanding recorded at $8.678bn during the period under review.

Within the public external debt, the Long-term debt stood at $73.14bn, up by 9% YoY compared to 3QFY20. Short-term debt (less than one year) decreased by 69% YoY to $833mn compared to the figure recorded at the end of March 2020.

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 declined by 20% YoY by the end of March 2020 to $2.29bn.

Long-term Bank borrowing recorded at $11mn, while when it compared with 3QFY20, it stood at $18mn, depicting a decline of 39% YoY.

Outstanding external debt of Public sector enterprises (PSEs) during 3QFY21 stood at $6.17bn, the figure was 65% higher when it compared with 3QFY20.

Private sector external debt, which attributed to 10% of the total external debt amounted to $11.1bn by the end of March 2021, depicting an increase of 1% YoY as in 3QFY20 it totaled at $11bn.

Additional data posted showed the GDP (Current Market Price) to have increased from $250.76bn in Jan-Mar FY20 to $305.85bn, showing a notable jump of 22% YoY.

Official liquid reserves increased from $11.397bn in 3QFY20 to $13.64bn, marking an increase of 20% YoY.

Debt Servicing

Pakistan’s total external debt servicing (principal and interest) by the government reached a total of $3.576bn at the end of March 2021.

On a sequential basis, the debt servicing cost increased marginally in 3QFY21 as it stood at $3.547bn during Oct-Dec FY21, while on yearly basis, it swelled by 30% from $2.746bn.

As per the quarterly data released by the State Bank of Pakistan (SBP) yesterday, Principal Amount payments during Jan-Mar FY21 totaled $3.06bn, a major chunk of which ($2.9bn) comes from the Public debt particularly concentrated under the Government Debt head. Interest payable on the principal of public debt totaled $432mn. While the interest paid on the principal of total debt totaled at $511mn. Furthermore, during the quarter, Pakistan paid $1.69bn and $222mn principal amount on government debt and on IMF loans respectively. Whereas $301mn and $38mn 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 $910mn (out of $1.69bn) was paid on Commercial loans and Credit followed by $454mn on multilateral loans as principal amount.

Moreover, to meet Foreign Exchange Liabilities, the government paid the sum of $1.094bn, of which $1000mn paid as principal and $94mn retired as interest payments.

Debt servicing of the Public Sectors Enterprises (PSEs) during the quarter reached $32mn, down by 18% QoQ and 89% YoY. Under this head, the country paid $26mn as principal payment and $6mn paid as interest.

Furthermore, the total debt servicing of the private sector (non-guaranteed debt) declined 63% QoQ and 56% YoY to $191mn in which $121mn  was retired as principal amount while $70mn were paid as Interest.

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