Pakistan's foreign debt rises to highest level, says central bank

KARACHI: The outstanding foreign debt against Pakistan has reached to the highest level in the country’s history to $96.735 billion, the State Bank of Pakistan figures showed yesterday.

The volume of the external debt and liabilities in the first quarter of the current fiscal year reported at 1.394 billion. The debt stood at 95.342 billion at the end of the previous financial year ended at June 30, 2018.

Most of this increase stemmed from the public external debt, which surged 14 percent to $76.340 billion.

Higher financing in the form of borrowing from Chinese disbursements, bilateral and commercial loans and the Eurobond/Sukuk proceeds added to the country’s foreign debt.

The central bank’s (SBP) data indicated that long-term foreign debt of the country stood at $64 billion at end-September, up from $56.3 billion at the same time last year.

The foreign reserves at the central bank fell to $7.602 billion in October from $13.491 billion in the same period previous year.

Moreover, recent devaluation of rupee would have negative impact for the public debt. The latest depreciation in the exchange rate will add around Rs300 billion in the foreign debt, analysts believe.

Pakistan will likely to secure IMF bailout to meet its external financing needs of $31 billion, experts said.

The analysts were of the view that Pakistan’s external debt growing every year due to successive governments’ inability to enforce policies that could ensure sufficient non-debt creating inflows.
The new government of Pakistan Tehreek-e-Insaf (PTI) too does not have any short term option except for taking more loans to meet the country’s debt obligations.