ISLAMABAD, Pakistan – Pakistan’s debt reaches to a record high, according to sources, jumping to almost 60 trillion Pakistani Rupees due to a huge currency depreciation and ongoing political crisis under Shehbaz Sharif government.
The increase in public debt was PKR9.3 trillion in the past one fiscal year but it swelled up to a record PKR49.2 trillion by end-June 2022, according to the State Bank of Pakistan (SBP), the Express Tribune reported.
Moreover, the central bank’s latest debt bulletin for the fiscal year 2021-22, which it released on Monday, showcased that the debt burden increased in terms of the size of the national economy, indicating that Pakistan is at its worst and under a heavy load of unbearable debt burden.
According to the SBP, the total debt and liabilities of the country increased to PKR59.7 trillion, a surge of PKR 11.9 trillion, or 25 percent, compared to the preceding fiscal year which clearly indicates that in the fiscal year 2021-22, the nation added one-fourth of the debt accumulated from 1947 to June 2021.
In terms of the size of the economy, Pakistan’s total debt and liabilities were equal to 76.4 percent in 2018 which jumped to 89.2 percent by June this year despite the rebasing of the economy.
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In late June,Pakistan received a $2.3 billion Chinese consortium loan that will help stabilize its fast-depleting foreign reserves, as country continue to look towards the International Monetary Fund (IMF) to restore a $6 billion package agreed upon in 2019.
So far half of the promised money had been given, and yet the two sides have to come up to an agreement.
“I am pleased to announce that Chinese consortium loan of RMB 15 billion (roughly $2.3 billion) has been credited into SBP (State Bank of Pakistan) account today, increasing our foreign exchange reserves,” minister Ismail said in a tweet.
Pakistan entered agreed a 39-month IMF programme in 2019, but less than half its $6 billion size has been disbursed as Islamabad has struggled to keep targets on track.
Pakistan’s foreign exchange reserves are under severe stress and declined by $190 million to $10.308 billion during the week ended on May 6, according to the State Bank of Pakistan (SBP).
The country is heavily dependent on foreign loans, as the Ministry of Economic Affairs data earlier this month showed that Pakistan received only $248 million in foreign loans in April, including $100 million worth of oil on deferred payments from Saudi Arabia.