Amid worsening economic crisis, Pakistan's debt surges by PKR 4,304 billion
Dec 17, 2024
Islamabad [Pakistan], December 17 : amid escalating economic crisis, Pakistan's debt surged by Pakistani Rupees (PKR) 4,304 billion in the first eight months of the current tenure, ARY News reported citing official documents.
As of October, the total debt stood at PKR 69.114 trillion, up from PKR 64.810 trillion in February, according to documents cited in the report.
Notably, the tax year in Pakistan is July 1 through June 30.
The domestic debt rose by PKR 4,556 billion during the period, while foreign debt decreased by PKR 251 billion, according to ARY News.
As a result, the domestic debt stood at PKR 47.231 trillion as of October, up from PKR 42.675 trillion in February. The foreign debt, on the other hand, decreased to PKR 21.884 trillion from PKR 22.134 trillion during the same period.
Last week, the World Bank cancelled a budget support loan of over USD 500 million to Pakistan after Islamabad failed to meet key conditions on time, including the revision of power purchase agreements under the China-Pakistan Economic Corridor (CPEC), as reported by The Express Tribune.
The Washington-based lender has also announced that it will not provide any new budget support loans during the current fiscal year, which could affect the government's expectation of receiving USD 2 billion in fresh loans.
A key reason for this decision is that Pakistan has largely exhausted its loan quota, the report stated.
In October, the Pakistan government's debt reached a record high of Pakistani currency (PKR) 70.36 trillion, a staggering figure that's sparking concerns about the country's economic stability, ARY News reported.
According to ARY News, federal debt increased by PKR 1,448 billion in just the first two months of the current fiscal year, with PKR 739 billion added in August alone, as per data released by the State Bank of Pakistan (SBP).
The federal government's debt rose by a staggering PKR 6,392 billion between September 2023 and August 2024. As of August 2024, domestic debt accounted for PKR 48,339 billion, while external debt stood at PKR 22,023 billion.
