Search:
articles
mediacoverage
photogallery
publications
usefullinks
 
Books

 

IFIs and Debit Policies

 

Pakistan IMF kai shukanjay mai

 

Pakistan Rising Debt: Govt adds Rs.1trillion in just 3 months

Express Tribune

Publishing Date: November 5th 2013

The national debt under Pakistan Muslim League-Nawaz (PML-N) government has piled up in three months to an unprecedented level and added Rs980 billion in its debt stock, taking the total debt to approximately Rs15 trillion.

The amount is exclusive of the loan obtained from the International Monetary Fund (IMF), aimed at averting a looming balance of payment crisis, according to figures released by the State Bank of Pakistan. The IMF loans are treated as the obligation of the SBP.

By end June of this year, the central government’s total debt was Rs14 trillion that increased to Rs14.98 trillion by end September, showing an increase of Rs980 billion or 7%, said the SBP.

Finance Minister Ishaq Dar, who was critical of the last Pakistan Peoples Party (PPP) government for doubling the country’s debt burden in just five years, himself has borrowed an average Rs10.9 billion a day, either to finance his government’s budget deficit or retire the earlier loans borrowed by the successive governments including his party’s two stints in power. The previous government was borrowing on average Rs3 billion to Rs4 billion a day.

The increasing debt burden will also augment the cost of the debt servicing, further thinning out the budgetary allocations. The debt servicing consumes the largest chunk of the budget followed by defence budget, both explicit and implicit.

Massive accumulation of the debt and subsequent borrowings from commercial banks and SBP have not only crowded out the private sector debt but is also fuelling inflation. The inflation in October accelerated to 9.1%.

According to the SBP, the domestic debt increased from Rs9.52 trillion to Rs10.16 trillion in just three months, showing an increase of Rs635 billion or 6.7%. Within the domestic debt, the short-term debt ballooned by Rs611 billion or 11.7%.

In June, the short term debt was Rs5.2 trillion that increased to Rs5.8 trillion, according to the SBP. In the short-term debt, the biggest jump came in the market treasury bills which were floated for making replenishing cash, as the commercial banks refused to reschedule their loans, seeing a desperate borrower in the government and on the anticipation of increase in interest rates under the IMF programme.

The debt under the market treasury bills for replenishment of  cash increased from Rs2.27 trillion to Rs3.1 trillion, depicting a net increase of Rs750 billion or 33%.

The external debt also increased by Rs325 billion or 7.3%. As against June 30 level of Rs4.48 trillion the external debt increased to Rs4.83 trillion, according to the SBP. Out of the total external debt, the major increase was in the long-term debt that increased from Rs4.48 trillion to Rs4.8 trillion, showing a jump of Rs325 billion or 7.3%.

About 7% devaluation of local currency against the US dollar was the main reason behind massive jump in the long-term foreign debt. The SBP stated that by end June the US dollar was equal to Rs99.20 that devalued by Rs6.90 to Rs106.1 a dollar by end September.

 

 

Source: http://tribune.com.pk/story/627293/rising-debt-govt-adds-a-trillion-in-three-months/ 

Protest demo against IFIs

Drop the Debt

 

Protest demo against IFIs

 Drop Pakistan Debt

Hole in the Bucket

 
Join Us
 
News & Events

PLEASE SIGN THIS URGENT PETITION TO THE IMF TO CANCEL PAKISTAN'S DEBT!

http://www.avaaz.org/en/petition/Cancel_Pakistans_Debt_2/?eKzSxeb


Pakistan says goodbye to IMF program

[details]

Pakistan Total External debt rises to $ 60 Billion

[details]

Home | About Us | News | Support Us | Contact Us | Articles | Media Coverage | Photo Gallery | Publications | Useful Links | 
 
Web Administrator Amjad Miandad