Federal govt’s debt surges 34% by April 2023 because of multiple factors
ISLAMABAD: The federal government’s debt has expanded by 34 percent by April 2023 because of multiple factors. Most important factors are high funding requirements, a lack of dollars inflows, currency depreciation, and growing interest payments.
According to the State Bank of Pakistan’s latest data, the total debt expanded to Rs58.598 trillion as of April 30. A year ago, this debt stood at 43.70 trillion in the same period last year.
The debt increased by 2.6% month-on-month and it amounted to Rs57.12 trillion in March 2023.
The SBP data indicates that the public debt is ballooning fast owing to the increasing financing needs of the government.
Meanwhile, the foreign currency inflows remained far less than anticipation as the IMF did not resume loan despite the fact the government fulfilled all the prior actions.
The debt climbed by 22.5% in 10 months (July-April) of this fiscal year. It had come to Rs47.832 trillion by the end of June. According to the SBP’s data, the increase in public debt was caused by an increase in external debt, which is a result of currency depreciation.
The value of rupee fell 53% in a year. In April 2023, it was trading at 283 per dollar, up from 185 in the same month the year before.
At the end of April, the domestic debt surged by 26.4% year-on-year to Rs36.549 trillion. The domestic debt rose by 17.57% during the 10 months of this fiscal year.
The foreign debt sharply increased by 49.1% to Rs22.050 trillion as of April from Rs14.791 trillion a year ago. The external debt grew by 31.6% in the period July–April fiscal year 2022-23.
Prime Minister optimistic of deal with IMF
Prime Minister Shehbaz is optimistic about signing a much-awaited deal with the International Monetary Fund (IMF) this month.
PM Shehbaz Sharif stated this in an interview with the Turkish News Agency Anadolu.
PM Sharif said Pakistan has completed all the terms and conditions of the ninth review of the IMF.
Pakistanis can hear good news about the resumption of IMF loan this month, he added.
Premier said, “Pakistan has fulfilled all requirements of the IMF as prior actions.”
The people of Pakistan have faced challenges in the past and they will “tighten our belt” and rise again in case the deal with IMF was not materialized.
PM Shehbaz said the coalition government has navigated challenges with the support of the people of Pakistan and with the help of “brotherly and friendly nations.”
