Pakistan’s foreign debt soars by $7.9 bn in a year

ISLAMABAD: Pakistan’s foreign debt and liabilities touched the highest figure of over $74 billion with the transfer of $1 billion in Pakistan’s account which was raised with the sale of sukuk bonds at interest rate of 5.5 percent.

Though Finance Minister Ishaq Dar in his press conference addressed in last week told journalists that with the sale of sukuk bonds Pakistan’s debt will not increase. As much as external debt and liabilities will go up its domestic debt will come down, the finance minister had said.

But the State Bank of Pakistan (SBP)’s figures showed that Pakistan’s external debt stood Rs74 trillion in the first month of the current financial year. The SBP figures showed an increase of about $12.15 billion in the last four years of sitting government.

Pakistan’s foreign debt and liabilities in July 2013 stood at $61.9 billion, which was the first financial year of the present government. In July 2014, Pakistan’s foreign debt soared to $63.4 billion, showing an increase of $1.5 billion in one-year time.

In July 2015, the next year, the total size of Pakistan’s foreign debt rose to $65.1 billion recording an increase of $1.7 billion in one-year time. Then started the next year i.e. July 2016, which showed an increase of $7.9 billion, the highest increase in debt in a one-year time. The SBP website reflects Pakistan’s total foreign debt piled up to Rs74 trillion, showing a record high debt in the history of the country.

Whereas the SBP figures showed that Pakistan’s domestic debt stood at about $73 billion in first month of current financial year. According to details of this debt, public debt is $61.4 billion, Public Sector Enterprises debt (guaranteed by GoP) have a loan of $1.3 billion, PSE (non-guaranteed) $1.5 billion and loaned from scheduled banks is $1.6 billion. Further that non-resident debt is $1.1 billion, private (non-guarantee debt) $3.3 billion.

When contactedm Finance Minister Ishaq Dar said that we got best rate for sukuk bonds. Sri Lanka and Bahrain had better credit rating then Pakistan but they couldn't get as low interest as Pakistan got. 

He further stated that two persons, looking for jobs, are spreading rumours about Pakistan's economy. The finance minister also clarified that at the one hand Pakistan's foreign debt has increased but on other hand domestic debt has decreased as this amount is with government and we can utilise it when required. He further stated that now with the grace of God Pakistan's reserves are equal to six months export bill.