KARACHI: Pakistan government’s total debt surged by 1.6 percent to Rs16.057tr as of August 31, 2014 since borrowing from domestic resources to reduce fiscal deficit continued, according to latest data from the State Bank of Pakistan (SBP). The government’s total debt was Rs14.453tr on August 31, 2013.
The government raised as much as Rs2.019tr through Pakistan Investment Bonds (PIBs) in 12 months, which took the federal government’s overall borrowing through bonds to Rs3.302tr by August 31, 2014.
The domestic debt surged by 1.36 percent to Rs11.062tr during the period under review solely because of liquidity mopping through PIBs.
However, government’s short-term floating debt was reduced by 14.15 percent to Rs4.62tr in the 12 months.
The external debt surged by 5.11 percent to Rs4.994tr primarily because of huge surge in short-term liabilities.
According to the SBP, the short-term liabilities increased to Rs80.5bn by August 31, 2014 against Rs17.6bn a year earlier.
Central government’s external debt excludes IMF loans to the central bank for balance of payment support, foreign exchange liabilities, and includes IMF loan for budgetary support.
Analysts said that higher borrowing from domestic banking system reflected that fiscal measures taken by the Pakistan Muslim League-Nawaz (PML-N) government were not fruitful and the government was dependent on banks to meet its financial obligations.
The stocks of domestic debt and liabilities have reached new highs mainly due to higher fiscal deficit, shortfall in tax revenue collection, and subsidies to power sector. INTERNEWS
