Pakistani government’s external debt rises 20% in first half of FY22 to Rs 21,000
The Pakistani government’s external debt has increased by 20% in the first half of the current fiscal year (2021-22), reaching a peak of 21 trillion rupees in December 2021.
According to data from the State Bank of Pakistan (SBP), the total stock of public debt increased by 8% in the first half of the current financial year (2021-22), bringing total domestic and external debt at a record high of 51.724 trillion rupees in December 2021, from 47.931 trillion rupees in June 2021, Business Recorder reported.
Continued borrowing from domestic and external resources to finance the budget deficit increases the country’s debt burden, the report added citing economists.
External debt included Rs 14.814 trillion in government external debt, Rs 4.223 trillion in non-government debt and loans of Rs 1.188 trillion from the International Monetary Fund (IMF).
Earlier this month, the IMF released another $1 billion tranche of loans to Pakistan, subject to meeting certain conditions. As a result, fuel prices and electricity tariffs in Pakistan have reached historic highs.
The new funds are part of a $6 billion rescue package that the IMF’s Executive Board authorized in July 2019.
The country is in a debt trap and Imran Khan’s government is looking for new debt instruments. It is also struggling to find ways to increase foreign direct investment (FDI).
Existing debt products appear insufficient to meet growing borrowing needs and the country is sliding into economic chaos.
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