The entire debt of the Centre increased by Rs11.13 trillion: SBP

Web DeskJuly 7, 2023
The entire debt of the Centre increased by Rs11.13 trillion: SBP

ISLAMABAD:

According to State Bank of Pakistan (SBP) figures, the federal government’s overall debt climbed by Rs11.13 trillion to Rs58.962 trillion (a 23.3% increase) during the first 11 months of fiscal year 2022-23.

According to the central bank’s figures, the federal government’s domestic debt increased to Rs37.054 trillion in May 2023 from Rs31.085 trillion, representing a 19.2% growth during the time under review.

Similarly, the federal government’s external debt increased by Rs5.161 trillion to Rs21.908 trillion (a 30.8% increase) during fiscal year 2022-23.

According to the central bank’s data, the present government relied heavily on borrowing to bridge the gap between its high spending and low revenue collection.

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The depreciation of the rupee had a significant impact on the value of debts.

Because of the depreciation of the local currency, the total volume of loans grew by 40%.

In the first 11 months (in 329 days) of the current fiscal year, the federal government borrowed 33.89 billion on a daily basis.

Every hour, a loan of Rs1.40 billion was obtained in this manner.

During the 11 months, the government’s borrowing from commercial banks in the form of treasury bills climbed from Rs6.752 trillion to Rs7.367 trillion.

Through the auction of Pakistan Investment Bonds (PIBs), a total of Rs4.59 trillion was borrowed. PIBs were worth Rs22.27 trillion as of May.

In May alone, the government borrowed Rs505 billion.

The increase in debt servicing as a result of large borrowings has caused major challenges in the budget for fiscal year 2023-24.

 

The government will spend at least Rs7.302 trillion on debt servicing in fiscal year 2023-24, accounting for more than half of the overall budget outlay of Rs14.460 trillion.

 

Foreign debt servicing will be more extensive than in fiscal year 2022-23. According to the budget paper, the country will spend Rs872.219 billion, up from Rs510.972 billion in the previous fiscal year.

 

 

 

 

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