ISLAMABAD    -   Pakistan’s external debt and liabilities surged to $105.84 billion by the end of March 2019 following the massive borrowings made by the successive governments.

The country’s debt and liabilities had gone up by $10.6 billion in nine months (July to March) of the ongoing fiscal year, according to the latest figures of State Bank of Pakistan (SBP). The debt and liabilities had increased to $105.84 billion in March 2019 from $95.24 billion in June 2018, showing an increase of $10.6 billion.

The successive governments in Pakistan had massively borrowed from external as well internal sources to meet the twin deficits including budget and current account. The governments had failed to enhance the country’s exports, which stood at $23 billion only. The incumbent PTI government, which criticized previous governments for borrowing, had also made significant borrowing since coming into power. The government had borrowed $9 billion from three friendly countries in last few months. Pakistan had barrowed $4 billion from China, $3 billion from Saudi Arabia and $2 billion from United Arab Emirates (UAE).

The present government had currently signed loan deal of $6 billion with International Monetary Fund (IMF), which would pave way for receiving loans from World Bank, Asian Development Bank and others. All these loans would further increase the country’s debt and liabilities in the months to come. Despite massive borrowing from external sources, the country’s foreign exchange reserves are at lower side. The country’s reserves held by the central bank are around $9 billion, which is enough to cover only one and half month’s imports bill of the country. The country’s foreign exchange reserves would remain under pressure during remaining months (May and June) of the ongoing fiscal year due to repayment on previous loan and interest payment.

The country’s interest payment is also increasing due to the massive borrowing. A sum of $2.35 billion was spent on servicing the outstanding stock of external debt during third quarter (January to March) of this fiscal year, according to the SBP. The country paid $1.7 billion in principal loans and $645 million in interest on outstanding loans in January to March period of the year 2018-19.

The total stocks of debt and liabilities comprise Paris Club, Euro Sukuk global Bond, IMF loan, foreign exchange liabilities; Public Sector Enterprises (PSEs) guaranteed debt and non-guaranteed debt, bank borrowing, non-residential deposits, private sector guaranteed/non-guaranteed debt and foreign exchange liabilities and debt liabilities to direct investors.

The breakup of $105.84 billion public debt and liabilities showed that external public debt stood at $84.23 billion in March 2019 compared to $75.36 billion at the end of June 2018. The public external debt posted an increase of 11.8 percent or $8.87 billion in the first nine months of this fiscal year. Similarly, among the public debt, long-term debt portfolio increased from $62.53 billion to $67.03 billion. The IMF debt had reduced to $5.77 billion in March 2019 from $6.095 billion of June 2018. In addition, PSEs debt went up to $3.48 billion in March 2019 as compared to $2.67 billion in June 2018.

With an increase of 9.74 percent or $430 million, bank borrowing reached $4.85 billion at the end of March 2019 compared to $4.416 billion in June 2018.

Private sector debt also showed an upward trend surging by 10.246 percent during the first nine months of this fiscal year. Private sector debt stood at $10.14 billion at the end of March 2019, up from $9.071 billion in June 2018. Similarly, during the period under review, debt liabilities to direct investors moved down $3.151 billion at the end of first half of this fiscal year.