Pakistan’s total debt and liabilities have reached Rs. 25.1 trillion in June 2017, depicting a growth of 11% and a net increase of Rs. 2.5 trillion in a year, making Pakistan prone to wider financial risks.
The country’s total external debt and liabilities increased to approximately $83 billion by the end of fiscal year 2016-17.
In terms of the existing economy size, the country’s debt and liabilities increased to 78.7% of the gross domestic product (GDP), exceeding safe boundaries for a developing country like Pakistan according to the data released by the State Bank of Pakistan on Thursday.
Every Pakistani now owes Rs. 120,789 compared to Rs. 91,000 in 2013, an increase of 32% within four years!
The total debt includes the obligations of both the government and private sector. The Private sector however is liable on a smaller scale.
Out of Rs. 25.1 trillion from the gross public debt, the government was responsible for Rs. 21.4 trillion of it
In an attempt to neutralize the chaotic situation the federal government has revised the definition of public debt twice. According to the finance ministry’s definition, the public debt was Rs. 19.64 trillion, but it has already been taken into court, in order to nullify the amendment.
The gross public debt of Rs. 21.4 trillion was equal to 67.2% of GDP, violating the original limit set under the Fiscal Responsibility and Debt Limitation Act, passed by parliament in 2005.
The external debt rose to Rs. 8.33 trillion. An addition of Rs. 960.3 billion in a single year, a 13% growth.
The increase in external debt is higher than the International Monetary Fund’s (IMF) estimated figure of $79.1 billion in its previous report.
The external debt servicing increased by another $2.8 billion (53.4%) during the past year.
The public external debt servicing stood at $6.5 billion – increase of $2.1 billion (57.4%). The principal loans repayment by the public sector stood at $5.2 billion (59.5%) in a single year.
The government’s domestic debt also swelled to Rs. 14.9 trillion – increase of Rs. 1.24 trillion or 9% over the previous year. The debt of public-sector enterprises grew at a pace of 44.7% and was registered at Rs. 822.8 billion.