Pakistan’s external debt surges by 38% on massive PKR devaluation during one year State Bank of Pakistan

Pakistan’s external debt surges by 38% on massive PKR devaluation during one year

KARACHI: Pakistan’s external debt sharply increased by 38 per cent to PKR 20.69 trillion by end of January 2023 when compared with the debt a year ago, according to data released by the central bank on Tuesday.

The State Bank of Pakistan (SBP) said that the external debt of the country was PKR 14.98 trillion a year ago i.e. January 2022.

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The massive increase in external debt may be attributed to massive devaluation in the local currency against the US dollar. The local unit recorded a decline of 51 per cent to the greenback as the exchange rate by end January 2023 was PKR 267.94 as against PKR 176.74 by end of January 2022.

The external debt includes central government’s external debt excludes IMF loans and foreign exchange liabilities, according the SBP.

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The central government’s total debt jumped to PKR 54.94 trillion by end of January 2023, showing an increase of 30 per cent during last one year. The data showed that the total debt on the country was PKR 42.4 trillion by end of January 2022.

Domestic debt has increased to PKR 34.26 trillion by end of January 2023 when compared with PKR 27.41 trillion a year ago, showing an increase of 25 per cent.

The data revealed that long term loans of the country increased to PKR 27.51 trillion by end of January 2023 when compared with PKR 21.66 trillion a year ago.

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Out of long term loans, the permanent debt has been increased to PKR 24.44 trillion as compared with PKR 18.05 trillion a year ago.

Unfunded debt including saving schemes, postal life insurance and GP Fund, has reduced to PKR 3.06 trillion when compared with PKR 3.61 trillion.

Whereas, foreign currency loans climbed up to PKR 11.3 billion as against PKR 7.5 billion.

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The size of short term loans under domestic debt has significantly increased to PKR 6.67 trillion by end of January 2023 when compared with PKR 5.71 trillion a year ago. The major surge in debt size under this head has been seen in maturities of commercial papers. The repayment under Market Treasury Bills (MTBs) surged to PKR 6.63 trillion by end of January 2023 when compared with PKR 5.65 trillion a year ago.