Federal Government Debt Surges, Reaching Rs 66.083 Trillion

In the first 10 months of fiscal year 2024, the total debt of the central government, both domestic and external, saw a significant increase of 8.6%. According to data released by the State Bank of Pakistan, the federal government's total debt surged to Rs 66.083 trillion by April 2024, up from Rs 60.841 trillion in June 2023, marking a substantial rise of Rs 5.242 trillion.

The domestic debt of the federal government also experienced a notable uptick, reaching Rs 44.48 trillion in April 2024 compared to Rs 38.810 trillion in June 2023. This increase in domestic debt was primarily fueled by a 14.6% rise in long-term debt, which reached Rs 35.22 trillion by April 2024. The long-term debt composition included Rs 32 trillion in permanent debt, Rs 2.79 trillion in unfunded debt, and Rs 373 billion in foreign currency loans.

Conversely, short-term domestic debt witnessed a slight decrease of 1.8% to Rs 9.166 trillion by April 2024. The federal government's external debt also saw a decline of 2%, dropping from Rs 22.031 trillion in June 2023 to Rs 21.602 trillion in April 2024. This external debt comprised Rs 21.499 trillion in long-term debt and Rs 102 billion in short-term debt. The Weighted Average Customer Exchange Rates for the US dollar stood at Rs 286.3905 in June 2023 and Rs 278.3527 in April 2024.

The increase in the federal government's debt highlights the ongoing financial challenges faced by the country. It is crucial for policymakers to address the rising debt levels and implement effective strategies to manage and reduce the debt burden. Understanding the dynamics of domestic and external debt is essential for ensuring sustainable economic growth and stability in the long run.