ISLAMABAD: The country’s public debt has risen 12.3% (Rs1.3 trillion) in just nine months of the outgoing fiscal year compared to the corresponding period of last year, indicating fiscal strain.
According to the Economic Survey 2011-12, public debt at the end of March this year stood at Rs12.1 trillion, which was equal to 58.2% of gross domestic product (GDP) compared to 55.5% in the same period last year.
The figure included Rs391 billion consolidated by the government against outstanding subsidies of previous years related to food and energy.
Historically, the public debt showed almost the same burden from domestic and external borrowing, but the government has increasingly focused on domestic sources – central bank and other banks – over the last few years because of a slowdown in external financing.
The share of domestic borrowing in total public debt surged from 46.6% in fiscal year 1990 to 59.9% at the end of March 2012.
Total size of the country’s GDP touched Rs20.6 trillion in the outgoing fiscal year. As a percentage of GDP, domestic debt accounted for 34.9% while foreign debt stood at 23.3%.
In relation to total debt, the share of domestic currency debt was 59.9% and that of foreign currency debt was 40.1%. Foreign currency debt in dollar terms stood at $53.1 billion by March 2012.
According to details, domestic debt increased by Rs1.2 trillion and reached Rs7.2 trillion compared to Rs6 trillion at the end of last fiscal year in June 2011, a rise of 19.8% in nine months.
Foreign debt rose by Rs124 billion and reached Rs4.9 trillion against Rs4.7 trillion in the first nine months of 2010-11.
The survey said total liquid foreign exchange reserves were valued at $16.49 billion by the end of April 2012, compared to $18.24 billion at the end of June 2011.
Published in The Express Tribune, June 1st, 2012.