Pakistan owes creditors Rs49,200 billion, says Dar

The total volume of debt on Pakistan has risen to Rs49,200 billion, the National Assembly was informed on Monday.

Finance Minister Ishaq Dar said that on June 30, 2022 the domestic debt on the country was Rs31,000 billion while the external debt amounted to Rs18,160 billion.

Earlier, a report of the finance ministry revealed that the country’s external debt sustainability indicators further worsened in the last fiscal year due to more reliance on short-term foreign loans and exposing the government to risks related to refinancing and rupee depreciation.

According to the Annual Debt Review and Public Debt Bulletin for fiscal year 2021-22, the public debt indicators pertaining to debt maturity, currency risks, refinancing risks and interest rate risks had deteriorated.

The report reflected poorly on the performance of the Public Debt Management Office and the federal government. The total public debt jumped from Rs39.9 trillion to Rs49.2 trillion within a year, an unsustainable increase of Rs9.3 trillion.

The finance ministry said that the Rs3.8 trillion worth of increase was due to currency depreciation as the exchange rate slipped from Rs157.3 to a dollar in June 2021 to Rs204.4 in June 2022. The rest of the increase was due to budget financing needs.

The share of external debt in the total public debt increased from 34% in 2020-21 to 37% in the last fiscal year, according to the report. It was heading towards the maximum limit of 40%.