ISLAMABAD          -        The ministry of finance on Thursday said that government had retired Rs855 billion to the State Bank of Pakistan (SBP) in last thirteen months by borrowing from the banks.

Officials of the ministry of finance have informed the media that the government has retired Rs 570 billion till June 2020 to the State Bank of Pakistan (SBP) and Rs 285 billion in the month of July 2020 by borrowing from the banks. They further informed that incumbent government is reducing the cost of domestic debt through re-profiling and its tenure has been increased while previous government borrowed at higher cost. 

Officials informed that Debt management wing of the ministry of finance is working actively. Giving details of the recent borrowing, they informed that three-year domestic Rs 16 billion PIB have been issued at 8.18 percent, 10 year Rs 55 million at 8.945 percent, 16 years Rs 20 billion at 9.91 percent and Rs 10 billion 20 year PIB at the rate of 10.4270. The government borrowing at this point in time from the banks will crowd out the private sector investment as businesses are showing interest to borrow from the banks following decrease in policy rate, they added.

According to the details shared by ministry of finance, Pakistan’s total public debt has enhanced to Rs36.3 trillion, which is 87 percent of the GDP, by the end of previous fiscal year. The public debt was at Rs6.1 trillion in 2007-08, Rs14.3 trillion in 2012-13, Rs25 trillion in 2017-18 and surged to Rs36.3 trillion in 2019-20. The public debt had increased by Rs8.2 trillion in PPP tenure from 2009 to 2013 and Rs10.7 trillion in PML-N tenure from 2013 to 2018. However, it went up by Rs11.3 trillion in two years of the incumbent government.

The total public debt has been increased Rs 36.3 trillion by the end of June 2020 with Rs 23.2 trillion domestic debt and Rs 13.1 trillion external debt. Exchange rate depreciation added Rs 3.5 trillion to the public debt and debt servicing Rs 4.7 trillion to the total debt during the last two years. This led to the change in public debt to Rs 11.3 trillion in the last two years as opposed to Rs 8.5 trillion during 2009-13 and Rs 10.7 trillion during 2014-18. The total public debt has been increased 36.3 trillion by the end of June 2020.