Pakistan's financial mismanagement continues, debt per person alarmingly high
Sep 21, 2024
Islamabad [Pakistan], September 21 : The average debt owed by every Pakistani citizen has reached a staggering high. Notably, the current severe situation of finances for the country is due to a habit of successive governments running state businesses through debt and loans extended by international lenders.
The average debt per citizen in Pakistan has now touched PKR 295,000. The total debt owed by the country currently has risen by PKR 8.36 trillion, bringing the total to PKR 71.24 trillion in 2024. Last year, the debt owed by Pakistan to international money lenders was PKR 62.88 trillion. The current debt level of Pakistan is 67.2 per cent higher than the country's Gross Domestic Product (GDP) ARY News said, citing a report by Pakistan's Ministry of Finance.
This increase in debt currently highlights the growing financial challenges faced by the country. The domestic debt within Pakistan has currently increased by PKR 8.350 trillion, reaching a total of PKR 47.160 trillion. On the other hand, Pakistan's external debt now stands at PKR 33.062 trillion. Out of that, the net government external debt has reached to PKR 21.75 trillion.
The same report by the ARY News also reveals an increase of PKR 292 billion in debt owed by Pakistan to the International Monetary Fund (IMF), bringing the total IMF debt to PKR 2.33 trillion. Additionally, the largest portion of Pakistan's domestic debt is attributed to the federal government bonds, which amount to PKR 32.8 trillion.
The current composition of this debt owed by the country includes Pakistan Investment Bonds (PIBs), which have exceeded PKR 28 trillion, and Sukuk bonds, which total PKR 4.77 trillion. Additionally, prize bonds contribute PKR 345 billion to the domestic debt.
The document by Pakistan's Ministry of Finance quoted in the ARY News report also indicates that Pakistan's foreign currency loans within the domestic debt amount to PKR 374 billion, and the Naya Pakistan Certificates account for PKR 84 billion.
Such a drastic increase in both domestic and external debt owed by the country to its creditors underscores the urgent need for economic reforms and management.
