SBP data reveals over a 27% increase in central Govt. debt

Sbp-data-reveals-over-a-27-increase-in-central-govt-debt

The latest data released by the State Bank of Pakistan (SBP) show a significant increase in the central government’s total debt.

SBP shows significant increase

In December 2023, the debt increased by 27.68 percent year on year (YoY), reaching Rs65.19 trillion versus Rs51.1 trillion in January 2022.

Debt increased by 2.84%

Analysing the figures sequentially, central government debt increased by 2.84 percent month on month (MoM), reaching Rs63.39 trillion in November 2023.

The substantial YoY increase in the debt burden is primarily due to borrowing from domestic and foreign sources to cover the fiscal deficit.

According to the details provided by SBP, the majority of the debt, totaling Rs42.59 trillion, was domestic. This represents a YoY increase of 28.4 percent.

Within this domestic debt, there was a difference between Rs34.1 trillion in long-term debt and Rs8.37 trillion in short-term debt. The remaining Rs22.6 trillion represented external debt.

As of December 2023, the government’s long-term debt had increased by 26.7% YoY to Rs34.1 trillion, up from Rs26.91 trillion in the same period last year.

Similarly, short-term debt rose 32.06 percent year on year, reaching Rs8.37 trillion from Rs6.16 trillion in December 2022.

When looking at the components of long-term domestic debt, Pakistan Investment Bonds (PIBs) accounted for Rs25.61 trillion, representing a 26.1 percent YoY growth and a 2.5 percent MoM increase.

Market Treasury Bills (MTBs) accounted for Rs8.29 trillion in short-term domestic debt, up 36.1 percent year on year and 9.9 percent month on month.

Naya Pakistan Certificates increased by 8.2%

Borrowing through Naya Pakistan Certificates increased by 8.2 percent YoY, reaching Rs118.7 billion in December 2023. However, on a monthly basis, there was a 5.4% decrease from Rs125.5 billion in November 2023.

A breakdown of the central government’s external debt shows that nearly Rs22.57 trillion came from long-term loans and Rs28 billion from short-term loans.

To read our blog on “Current account of Pakistan shows $9 mn Surplus in Nov 2023,” click here

Muhammad Kamal
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