KARACHI: Amid disturbing economic indicators, the country has also come across swelling debt — both domestic and external — mainly owing to exchange rate volatility.
The federal government’s total debt reached record mark of Rs64 trillion by the end of August 2023 against Rs60.839tn in June 2023, the State Bank of Pakistan (SBP) has reported.
The central government’s total domestic and external debt stocks jumped by five percent during the first two months of FY24.
During the period under review, the major increase was recorded in the external debt, which jumped by 10 per cent or Rs2.144tn. The federal government’s external debt surged to Rs24.175tn in August 2023 up from Rs22.031tn in June 2023.
The country’s external debt included Rs24.106tn of long-term debt and Rs69 billion of short-term loans.
According to economic analysts, the massive exchange rate volatility and Pak Rupee depreciation against the US dollar has largely contributed to the external debt surge.
The SBP says the US dollar exchange rate was Rs305.6174 in August 2023 as against Rs286.3905 in June 2023.
An upward trend was also seen in the federal government’s domestic debt, which went up by 2.5pc percent or Rs983bn during 2MFY24. The government’s domestic debt stocks reached Rs39.792tn in August 2023 as against Rs38.809tn in June 2023, the central bank data shows.
