ISLAMABAD, Jun 11 (APP):Pakistan’s total public debt was recorded at Rs 35,207 billion by end March 2020 compared with Rs 32,708 billion at end June 2019, registering an increase of Rs 2,499 billion during first nine month of current fiscal year.
According to Pakistan Economic Survey, the federal government borrowing for financing of its deficit was Rs 2,080 billion.
According to the pre-budgetary document, the country’s strategy to reduce its debt burden to a sustainable level included commitment to run primary surpluses, maintain low and stable inflation, promote measures that support higher long-term economic growth and follow an exchange rate regime based on economic fundamentals.
The debt differential was mainly attributable to depreciation of Pak Rupee, increase in cash balances of the federal government and difference between face value (which is used for recording of debt) and the realized value (which is recorded as budgetary receipt) of PIBs issued during the period.
Public debt portfolio witnessed various positive developments during the ongoing fiscal year, it added.
Most of the net domestic debt raised was through medium-to-long-term government securities (Pakistan Investment Bonds) and National Saving Schemes.
The cost of borrowing through long term government bonds declined whereas no new borrowing was made from SBP during ongoing fiscal year. To diversify investor base in government securities and capitalize liquidity available with Islamic Financial Institutions, government has started issuance of 5-Year Floating Rate Sukuk.
All of the net external debt raised during first nine months of current fiscal year was from multilateral and bilateral sources on concessional terms.
Domestic debt was recorded at Rs 22,478 billion at end March 2020 while the domestic borrowing operations remained quite successful during ongoing fiscal year despite challenging macroeconomic situation.
External public debt stock reached US$ 76.5 billion (Rs 12,729 billion), witnessing an increase of US$ 3.0 billion during first nine months of current fiscal year.
The document said that interest expense was expected to remain significantly less than the budgeted amount in 2019-20 owing to re-profiling of short-term debt into long-term debt and sharp decline in cost of borrowing in longer tenor.
The government also aims to bring and maintain its Debt-to-GDP and Debt Service-to-Revenue ratios to sustainable levels through combination of greater revenue mobilization, rationalization of current expenditure and efficient/productive utilization of debt.