Pakistan’s public debt has skyrocketed, hitting a record high of Rs. 54.942 trillion in January 2023, an increase of 29.6 percent YoY, according to the State Bank of Pakistan (SBP). The central government’s domestic debt surged by 23 percent, rising from Rs. 27.413 trillion to Rs. 34.225 trillion during the same period. The data reveals that the long-term public debt surged from Rs. 21.668 trillion to Rs. 27.514 trillion. Additionally, the stock of short-term debt increased from Rs. 5.705 trillion to Rs. 6.691 trillion over the last year.
The government raised Rs. 6.384 trillion by issuing Federal Government Bonds, including Pakistan investment bonds and GOP Ijara Sukuk and Bai-Muajjal of Sukuk. The total debt stock of Federal Government Bonds rose from Rs. 17.202 trillion to Rs. 23.586 trillion, and Rs. 9 billion was raised through the issuing of Prize Bonds in one year.
Foreign currency loans have also increased to Rs. 11 billion from Rs. 8 billion during the period. The report shows that the external debt of the central government rose to Rs. 20.687 trillion from Rs. 14.983 trillion, reflecting an increase of 15.7 percent. Furthermore, the currency exchange rate rose by Rs. 91 to Rs. 267.9 during the last year.
The government’s efforts to control the rising debt have not produced desirable outcomes. Despite the recent Moody’s downgrade of ratings for five major Pakistani banks, the government has been implementing austerity measures and structural reforms, including the imposition of additional taxes and subsidies. However, it seems that these efforts have yet to bear fruit as the country’s public debt.