Bowing down: Country spends 44.5% revenue to service debt

Ate up Rs1.193t; domestic debt comprises major chunk of pie.


Our Correspondent June 05, 2015
Debt servicing ate up Rs1,193 billion during July-March 2014-15 against the annual budgeted estimate of Rs1,686 billion, it said. ILLUSTRATION: JAMAL KHURSHID

KARACHI:


Pakistan spent 44.5% of its total revenue to service debt payments in nine months till March 2015 compared to 47% spent during the same period of previous year, the Economic Survey 2014-15 said.


Debt servicing ate up Rs1,193 billion during July-March 2014-15 against the annual budgeted estimate of Rs1,686 billion, it said.

Around 76% of these payments were made on domestic debt, which has grown in recent years.

As a percentage of GDP, Pakistan’s public debt came down to 61.8% by the end of March 2015, compared to 62% during the same period last year.

Public debt stands at Rs16,936 billion with the major chunk (Rs11,932.2 billion) comprising of domestic debt while component of external debt is around Rs5,004 billion.

Domestic debt increased by Rs1,012 billion in nine months till March 2015 over the same period of last year.

“This increase mainly stems from net issuance of PIBs and T-bills amounting to Rs781 billion and Rs566 billion respectively, while the stock of Market Related Treasury Bills (MRTBs) amounting to Rs605 billion was retired during the first nine months,” states the survey.

While the country’s debt-to-GDP ratio has gradually increased in the last five years, the government has been relying more on medium- to long-term credit instruments including Pakistan Investment Bonds and Ijara Sukuk.

External debt and liabilities stood at $62.6 billion at the end of March 2015 out of which external public debt was $49.1 billion.

“Public external debt witnessed a decline of $2.3 billion during the first nine months of current fiscal year despite net positive disbursements. This reduction in external debt was mainly contributed by translational gain on account of appreciation of US dollar against other major currencies,” the survey added.

During the period under review, disbursements including loans and grants stood at $4,001 million compared with $2,301 million during the same period last year.

“Pakistan also received $2,106 million from the IMF. Importantly, net inflows from the IMF stood at $1,041 million during the first nine months of current fiscal year compared with net outflow of $861 million during the same period last year.”

This pace of external inflows is likely to continue in the future, according to the survey.

Pakistan also returned to the international bond market in November 2014 and issued of $1-billion sukuk bonds.

Published in The Express Tribune, June 5th,  2015.

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COMMENTS (8)

Atheist_Pakisani | 6 years ago | Reply Thanks for the thought provoking reply. Most of it went over my head but it's fascinating. I hope Isaq Dar reads your blog and decide to do something for the good of the 190 million people instead of the banks.
asad rizvi | 6 years ago | Reply @hamza khan No, this is what you are amusing. I am a professional. I have provided you the data from SBP website. It is for the readers to judge ;) .
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