Pakistan’s Domestic Debt is Higher Than The Debt Recorded in 2017
Pakistan’s Domestic Debt is Higher Than The Debt Recorded in 2017: In January 2018, Pakistan’s domestic debt rose to 8.82% about Rs15.796 trillion. This is higher than the debt recorded in January 2017.
The government has continuously relied on domestic sources over the past few years to encounter its budget deficit financing needs. State Bank of Pakistan (SBP) figures showed that majority of the government’s domestic debt was contributed by a short-term debt. The short-term debt rose to Rs7.944 trillion in January 2018 from Rs6.492 trillion a year ago.
Analysts said the reason of increase in domestic debt remained high after the completion of $6.4 billion worth of International Monitory Fund (IMF) supported extended fund facility programme in August 2016. The budget deficit rose due to low revenue collection, higher spending on electricity subsidies and development related expenditure in terms of China-Pakistan Economic Corridor (CPEC).
FY18 budget deficit can be higher than the government target of 4.1% of gross domestic product (GDP) predicted by the financial analysts adding that this growing budget deficit could lead to further expansion in domestic debt in months to come. The central bank estimated the budget deficit could be 5-6% of GDP during FY18. However Pakistan managed to curb its fiscal deficit at 2.2 % of GDP in the second half of the current fiscal year, aided by lower development expenditure.
As per IMFstatement on the first post-programme monitoring discussion with Pakistan the fiscal deficit is expected at 5.5%of GDP this year, with risks towards a higher deficit ahead of upcoming general elections.
While in a press statement Advisor to Prime Minister on Finance, Miftah Ismail has said that the federal government would present budget for the fiscal year 2018-19 on April 27. Miftah Ismail said PML-N government would complete its tenure on May 31st adding that the federal budget for the fiscal year 201-2019 would be presented on April 27.