Pakistan's external debt, liabilities jump to $99.1b: SBP

Pakistan's external debt and liabilities increased to a record $99.1 billion by the end of December 2018.

The country's external debt and liabilities surged by $3.77 billion to $99.1 in first six months (July to December) of the ongoing fiscal year, according to the State Bank of Pakistan (SBP)'s latest data. The country's external debt and liabilities were at $95.34 billion at the end of previous year.

Pakistan's external debt is rapidly increasing as the successive governments had heavily depended on securing foreign debts instead of increasing exports. However, the country's foreign exchange reserves are currently enough to cover only one and half months imports of the country despite massive borrowings. The reserves held by the SBP stood at only $8.21 billion.

The incumbent government had also approached different countries like Saudi Arabia, United Arab Emirates and China and also International Monetary Fund ( IMF) for fresh borrowing.

The

country's

interest payment is also increasing due to the massive borrowing. A sum of $2.9 billion was spent on servicing the outstanding stock of external debt during first six months of this fiscal year, according to the SBP. The country paid $2.1 billion in principal loans and $826 million in interest on outstanding loans in July to December 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 (PSE) guaranteed debt and non-guaranteed debt, bank borrowing, non-residential deposits, private sector guaranteed/nonguaranteed debt and foreign exchange liabilities and debt liabilities to direct investors.

The breakup of $99.11 billion public debt and liabilities showed that external public debt stood at $78.46 billion in December 2018 compared to $75.36 billion at the end of June 2018. The public external debt posted an increase of 4.11 percent or $3.1 billion in the first half of this fiscal year. Similarly, among the public debt, long-term debt portfolio increased from $62.53 billion to $65.54 billion. The IMF debt had reduced to $5.901 billion in December 2018 from $6.095 billion of June 2018. In addition, PSEs debt went up to $2.68 billion in December 2018.

With an increase of 8.37 percent or $370 million, bank borrowing reached $4.79 billion at the end of December 2018 compared to $4.416 billion in June 2018.

Private sector debt also showed an upward trend surging by 2.86 percent during the first half of this fiscal year. Private sector debt stood at $9.33 billion at the end of December 2018, up from $9.071 billion in June 2018. Similarly, during the period under review, debt liabilities to direct investors moved down $3.84 billion at the end of first half of this fiscal year.

The government had already conceded serious violations of the Fiscal Responsibility & Debt Limitation Act ( FDRLA) on both fiscal and external fronts.

Pakistan’s external debt and liabilities soared to a record $96.7 billion by the end of September 2018, which appeared understated by $3 billion, as the central bank did not explicitly show the debt taken from China for shoring up foreign currency reserves. The external debt and liabilities increased to $ 96.7 billion as of September-end, reported the State Bank of Pakistan (SBP) on Tuesday.