Total central govt debt rise to Rs 50 trillion, up 24.5 percent over last year

— Govt borrowed Rs 9.9 trillion in past one year

— Rs 750 billion borrowed in past one month only

ISLAMABAD: Central Government debt increased to Rs 50.1 trillion in October 2022, rising Rs 750 billion in a month and Rs 9.9 trillion in a year. 

External debt, a major pain point for the cash-strapped and reserve-hungry country stands at Rs 17.6 trillion, up 27.8% over last year, but down 1.9% over last month.

Central government domestic debt comprised 64% of total debt, whereas the remaining 35% consisted of external debt. The country’s domestic debt clocked in at Rs 32.5 trillion, up 22.8% in a year, and inched up 3.5% in a month. 

The domestic debt is concentrated primarily in long term, with most coming in the form of permanent debt made up of federal government bonds. Short-term debt makes up 20% of Pakistan’s domestic debt, clocking in at Rs 6.7 trillion, up 5.4% over last year and up 0.5% in a month. 

Permanent debt includes medium and long-term debt such as treasury bonds, or investment bonds that take longer to mature with tenors of 3, 5, 10, 15, and 20 years. They are sold through primary dealers at auctions, usually on a quarterly basis. 

Primary dealers are banks or other financial institutions (in Pakistan, they are only banks) that are appointed by the SBP to participate in government securities auctions. As a general principle, the longer the duration for the bond to mature, the higher the yield one would receive due to the risk associated with time. These are called Pakistan Investment Bonds or PIBs for short.

Unfunded debt, a component of long-term debt for the month of October 2022 is $3 trillion, down 14% over last year, and 1.2% over September 2022. Unfunded debt is the outstanding balance of the various national savings schemes, primarily made up of various instruments available under these schemes.