Due to the country’s large fiscal imbalance, the country’s total debt (domestic and external) stocks reached a historic high of Rs 37.99 trillion at the end of May 2021.
According to the State Bank of Pakistan (SBP), the federal government’s overall debt stocks climbed by 8% in the first eleven months of the fiscal year (FY21). Domestic and external debt stocks held by the central government climbed by Rs 2.89 trillion to a new high of Rs 37.99 trillion in May 2021, up from Rs 35.107 trillion in June 2020. According to experts, “excessive reliance on domestic and external resources for fiscal deficit financing is increasing the country’s debt burden.”
Domestic debt increased by 12 percent during the time period under consideration. The federal government’s domestic debt increased by Rs 2.783 trillion in the first eleven months of the fiscal year to Rs 26.065 trillion in May 2021, up from Rs 23.282 trillion in June 2020.
Similarly, the federal government’s external debt increased by 1% to Rs 11.932 trillion in May 2021 from Rs 11.825 trillion in June 2020, indicating an upward trend.
Permanent debt, unfunded debt, and floating debt make up the total domestic debt stock, according to State Bank. Furthermore, historically, residents’ Foreign Exchange Bearer Certificates, Foreign Currency Bearer Certificates, Dollar Bearer Certificates, and Special US Dollar Bonds were considered external debt liabilities, but from June 2008, they have been considered domestic debt.
