ISLAMABAD-Pakistan repaid $10.14 billion loan in previous fiscal year (2019-20), which also included the interest payment. The country’s total servicing of external public debt was $10.140 billion in last fiscal year against the annual repayment estimates of $10.423 billion for the entire fiscal year, according to the latest data of Economic Affairs Division (EAD). The breakup of $10.14 billion showed that the government had repaid $8.338 billion (82 percent of total external public debt servicing) as principal debt and $1.802 billion (18 percent) as interest on the outstanding stock of external public debt. During the year, 2019-20, the government had settled $4.401 billion worth of foreign commercial loans and repaid $1 billion worth of Sukuk issued in December, 2014. Further, the government repaid $2.212 billion to multilateral and $725 million to bilateral development partners. For the period July-June, 2019-20, net transfers to the government were $1.211 billion.

The government had to borrow to repay previous loans and maintain the country’s foreign exchange reserves. Pakistan had taken $10.662 billion total external inflows from multiple financing sources during the previous last financial year. The government was supposed to borrow $13 billion in year 2019-20. The gap between the budgetary target of $13 billion and the actual inflows of $10.6 billion is primarily because government was unable to issue Eurobonds of amount $3,000 million in the international capital markets. In the aftermath of COVID-19 and its persistence in the country the disbursements of project aid from development partners dried up during the last quarter of the outgoing fiscal year 2019-20. The total receipt of $10,662 million constitutes $4,000 million or 37 per cent as program/budgetary support assistance from Asian Development Bank, World Bank, Korea and U.K. to restructure Pakistan’s economy; $3,373 million (32 per cent) as foreign commercial borrowing to repay maturing international Sukuk and other foreign commercial loans. The successive governments are borrowing from external as well as internal sources, which had increase the volume of overall public debt of the country. Pakistan’s external debt and liabilities increased to nearly $112.8 billion at the end of June this year.  Meanwhile, Pakistan’s overall total public debt has enhanced to Rs36.3 trillion, which is 87 percent of the GDP, by the end of previous fiscal year.  The breakup of Rs36.3 trillion loan showed that Pakistan’s domestic debt is Rs23.2 trillion and external debt is Rs13.1 trillion.

The debt is increasing continuously according to the data. 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.