KARACHI: The State Bank of Pakistan’s latest data reveals a substantial 24% year-on-year rise in the federal government’s domestic debt, reaching Rs40.955 trillion at the end of November 2023, compared to Rs32.985 trillion in November 2022.
The increase of Rs7.985 trillion in the first five months of the current fiscal year reflects the growing burden of debt servicing, with domestic debt swelling by Rs2.146 trillion from June 30, 2023.
The rapid growth in domestic debt, coupled with elevated foreign debt servicing, has limited space for development spending, leading to increased government borrowing.
The budget for FY24 allocates Rs7.302 trillion for debt servicing, accounting for 50.5% of the total budget outlay of Rs14.46 trillion.
The government’s borrowing, particularly through Pakistan Investment Bonds (PIBs), has surged, increasing by Rs5.514 trillion to Rs24.976 trillion year-on-year. The external debt in PKR terms rose by 24.8%, reaching Rs22.434 trillion by the end of November 2023.
The total federal government debt, encompassing domestic and external components, stood at Rs63.389 trillion, reflecting a significant 24.4% increase from November 2022.
