Pakistan’s Public Debt Soars By PKR 18 Trillion

Pakistan’s public debt has soared by over 18 trillion Pakistani Rupees (PKR) in the last three and a half years of the outgoing Imran Khan’s government, which is more than the liabilities accumulated by any government in the country’s history, a central bank statement said.

The federal government debt jumped to PKR 42.8 trillion by February 2022, an addition of PKR 18.1 trillion in three and a half years, according to the State Bank of Pakistan’s (SBP) monthly debt bulletin released on Tuesday.

The previous governments of Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples Party (PPP), had added nearly PKR 18 trillion to the public debt in 10 years, a mark that the Pakistan Tehreek-e-Insaf (PTI) government crossed in just three and a half years, Express Tribune reported.

From September 1, 2018, to the end of February 2022, the PTI government on average added PKR 14.2 billion per day to the public debt, which was more than double the PML-N period’s average increase of PKR 5.6 billion a day.

The total public debt increased by a whopping 73 per cent from September 2018 to February 2022, an unsustainable 20.3% average increase each year, the report further said.

The finance ministry has also been left at the mercy of commercial banks that are taking loans from the central bank at around 9.8 per cent but are giving funds to the government at 12.7 per cent for up to one year.

The accumulation of debt is a direct result of the gap between expenditures and revenues, which is widening due to debt servicing obligations and defence needs, and the Federal Board of Revenue’s (FBR) failure to enhance revenue collection to a sustainable level, the report said.

Notably, the external debt of the federal government increased at an alarming pace of 90 per cent to PKR 15.1 trillion in the last three and a half years.

There was a net increase of PKR 7.1 trillion in the external debt, largely due to currency depreciation and building foreign currency reserves through borrowing, the report said.

The ongoing constitutional crisis in Pakistan amid the dissolution of the National Assembly by Imran Khan is expected to even further affect the fragile economy of the country, with the International Monetary Fund (IMF) effectively suspending its programme in the country till a new government is formed. (ANI)

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