Amid worsening economic crisis, Pakistan’s debt increases by PKR 4,304 billion

Amid the growing economic crisis, Pakistan’s debt has increased by Pakistani rupees (PKR) 4,304 billion in the first eight months of the current tenure, ARY News reported citing official documents.

According to documents cited in the report, total debt as of October stood at PKR 69.114 trillion, up from PKR 64.810 trillion in February.

It is noteworthy that the tax year in Pakistan is from 1 July to 30 June.

According to ARY News, domestic debt increased by PKR 4,556 billion during this period, while external debt decreased by PKR 251 billion.

As a result, household debt rose to PKR 47.231 trillion by October from PKR 42.675 trillion in February. On the other hand, foreign debt declined from PKR 22.134 trillion to PKR 21.884 trillion during the same period.

Last week, the World Bank had canceled a budget support loan of over USD 500 million to Pakistan after Islamabad failed to timely fulfill key conditions, including the modification of power purchase agreements under the China-Pakistan Economic Corridor (CPEC). Was, as stated in the report. Express Tribune.

The Washington-based lender has also announced it will not provide any new budget support loans during the current fiscal year, which could hurt the government’s hopes of obtaining $2 billion in new loans.

The report said that a major reason for this decision is that Pakistan has exhausted its borrowing quota to a large extent.

Pakistan government debt reached a record high of Pakistani currency (PKR) 70.36 trillion in October, a staggering figure that is raising concerns about the country’s economic stability, ARY News reported.

According to data released by the State Bank of Pakistan (SBP), federal debt increased by PKR 1,448 billion in the first two months of the current fiscal year, with the increase by PKR 739 billion in August alone, according to ARY News.

The federal government’s debt increased to PKR 6,392 billion between September 2023 and August 2024. As of August 2024, domestic debt stood at PKR 48,339 billion, while external debt stood at PKR 22,023 billion.