KARACHI: In the first five months of the current fiscal year, central government domestic debt rose by Rs829 billion to Rs24.11 trillion, but the trend shows that the rate of borrowing has been slower in FY21 than in the previous 12 months.
The most recent data released by the State Bank on Monday showed that in November 2019, the domestic debt was Rs21.41tr, which jumped to Rs24.11tr in November 2020, a rise of Rs2.7tr.
The data showed that as of November 2019, the domestic debt and liabilities of the government collectively grew by Rs2.75tr in November 2020. Via Pakistan Investment Bonds, much of the domestic debt, over 50%, was mobilised (PIBs). Up until November 2020, the government collected Rs14.033tr via PIBs, an improvement of Rs1.827tr over the last 12 months.
During the first five months of the current fiscal year, much of the debt of PIBs was mobilised. The PIBs were Rs12.866tr in June 2020, which increased by Rs1.747tr during the current fiscal first five months. As these bonds deliver higher returns, long-term PIBs are not only favoured by domestic investors, but also by international investors.
The State Bank showed that, as a percentage of gross domestic debt, total external debt decreased significantly to 41.4% in September 2020, compared with 45.5% in June 2020.
In September 2019, the gross external debt was 40.1pc as a percentage of GDP. As a percentage of GDP, a big shift was noticeable in total debt and liabilities, falling to 98.3pc in September 2020 compared to 106pc in June 2020.