Public debt recorded at Rs 19,168 by March end

1387

ISLAMABAD, Jun 2 (APP): The Public debt by the end of March 2016 was recorded at Rs.19,168 billion, registering an increase of Rs.1,787 billion during first nine month of current fiscal year.

According to Pakistan Economic Survey, launched here by
Finance Minister Muhammad Ishaq Dar, out of this total increase, increase in domestic debt was Rs.1,200 billion while government borrowing from domestic sources for financing of fiscal deficit was Rs.786 billion.

This differential is mainly attributed to increase in
government credit balances with State Bank of Pakistan/commercial banks.
Similarly, increase in external debt contributed Rs.588
billion to public debt, it added.
Apart from fresh external inflows, revaluation loss on account of depreciation of US Dollar against other international currencies as well as depreciation of Pak Rupee against US Dollar contributed to this increase.
Similar to the last year’s trend, composition of public debt
further improved due to increased mobilization through medium to long term domestic debt instruments and higher disbursements from external sources.
Some of the positive developments on this front include the
conducive economic environment coupled with supportive monetary policy provided opportunity for the government to reduce the interest rates on its wholesales debt instruments along with aligning the rates on retail debt instruments with the market yields.
As a result, the cost of domestic borrowing is expected to
reduce in the coming years on account of new debt issuance/rollover of existing debt.
The government updated its Medium Term Debt Management Strategy to ensure that both the level and rate of growth in public debt is fundamentally sustainable and can be serviced under different circumstances while meeting cost and risks objectives.
Major debt sustainability indicators have improved in the last
two fiscal years, a fact that is acknowledged by global
stakeholders;
Government’s vision is to further reduce the statutory debt
limit from existing 60 percent to 50 percent of GDP in 15 years, starting from 2018-19 and to limit statutorily the federal fiscal deficit to 4 percent through introduction of an amendment bill in the parliament for necessary changes in the Fiscal Responsibility and Debt Limitation Act.