National debt of Pakistan
The national debt of Pakistan (
Pakistan is accumulating Rs14 billion in loans daily to meet its expenses, resulting in a rise in both its domestic and external debt, which now stands at $28 billion.[2][3]
History
In 2008 when
After
After 2018 Pakistani general election, Imran Khan came to power. During his rule of 3 years still today Pakistani external debt increased from US$75.3 billion to US$110.6 billion an increase of 35.3 billion USD (214 percent).[5]
According to a report by the International Monetary Fund, Pakistani owes China 30% of its $100 billion foreign debt.[6] China has now become the biggest bilateral lender to Pakistan, surpassing all other creditors.[7]
Public debt
As of June 2023, Total Public Debt and Liabilities of Pakistan is estimated to be about Rs. 62.881 trillion/US$223.86 billion which is 74.3 percent of gross domestic product (GDP) of Pakistan.[8] About Rs. 24.309 trillion (US$87.24 Billion as of June, 2024) is owed by the government to domestic creditors, and about Rs. 1.67 trillions/$6 Billion owed by Public Sector Enterprises (PSEs).[8]
Pakistan is facing a "huge external financing gap" of $4 billion, with China, Saudi Arabia, and the UAE expected to provide additional support. The
(The now former) Foreign Minister Bilawal Bhutto Zardari of Pakistan asked the International Monetary Fund to soften the conditions of its bailout package to help the country protect flood victims from rising prices.[10]
IMF urged Pakistan to hike its general sales tax rate to at least 18% in an effort to bolster revenue. The country's debt servicing costs are expected to surge to a high of Rs5.2 trillion in the current fiscal year. The IMF demand was made as the government shared its revised macroeconomic projections showing inflation rising to 29% and economic growth rate slowing to 1.5%, which will lead to higher unemployment and poverty in the country [11] and debt-driven rising prices, food insecurity, and a growing debt burden add to Pakistan's other challenges and no doubt Inflation is running above 38 percent annually.[12] As Pakistan's rupee experiences a significant depreciation and its foreign exchange reserves dwindle, the nation is facing challenges in importing crucial goods such as food, which has even resulted in tragic stampedes at distribution centers. This has raised concerns within Pakistan about the country's ability to meet its debt obligations.[13]
Pakistan boasts one of the world's highest debt-to-GDP ratios and has procured a substantial sum of funds from international financial institutions to fulfill its financial requirements. This borrowing pressure has diminished the nation's foreign exchange reserves and resulted in the devaluation of its currency.[14]
External debt
As of December 2023, Pakistan's total external debt is $131.159 billion.[15] Pakistan owes US$7.541 billion to Paris Club, US$38.813 billion to multilateral donors, US$7.596 billion to International Monetary Fund, and US$7.8 billion to international bonds such as Eurobonds, and Sukuks.[16]
According to a report by AidData, Pakistan's total external debt owed to China amounted to $68.91 billion as of November 2023.[15] The research identified 433 Chinese-funded projects in Pakistan from 2000 to 2021, making Pakistan the third-largest recipient of Chinese overseas funding in this period, after Russia and Venezuela.[15] The report also states that between 2012 and 2021, Pakistan received emergency rescue loans from China each year to avert balance of payments crisis, and in 2020, China rescheduled at least one of these loans.[15][17]
Category | Amount (in million $USD) |
---|---|
A. Public external debt | 99,700.4 |
1. Government external debt | 80,165.4 |
a. Long term (>1 year) | 80,066.1 |
i. Paris Club debt | 7,541.1 |
ii. Multilateral debt (i.e. World Bank, Asian Development Bank, Islamic Development Bank) | 38,813.6 |
iii. Other bilateral debt (i.e. China) | 19,644.1 |
iv. Eurobonds and Sukuks | 7,800.0 |
v. Commercial loans/credits (from Chinese banks) | 5,611.3 |
vi. Local Currency Securities (Pakistan Investment Bonds (PIBs)) | 3.5 |
vii. NBP/BOC deposits/PBC | 24.1 |
viii. Naya Pakistan Certificates | 628.3 |
b. Short term (<1 year) | 99.3 |
i. Multilateral* | 99.3 |
2. IMF debt
|
7,596.3 |
a. Federal government | 5,069.3 |
b. State Bank of Pakistan | 2,527.0 |
3. Foreign exchange liabilities | 11,938.6 |
a. Central bank deposits | 3,700.0 |
b. Other liabilities (SWAP with People's Bank of China) | 4,271.0 |
c. Allocation of SDR1 | 3,966.6 |
B. Public sector enterprises (PSEs) | 7,869.1 |
1. Guaranteed debt | 7,014.9 |
a. Other bilateral | 6,532.5 |
b. Commercial loans | 482.4 |
2. Non-guaranteed debt | 854.2 |
a. Long term (>1 year) | 48.6 |
b. Short term (<1 year) | 305.6 |
c. non-guaranteed bonds | 500.0 |
C. Banks | 6,637.8 |
1. Borrowing | 3,661.7 |
a. Long term (>1 year) | 1,300.0 |
i. Private sector | 1,300.0 |
b. Short term (<1 year) | 2,361.7 |
i. Public sector | 90.6 |
ii. Private sector | 2,271.1 |
2. Nonresident deposits (LCY & FCY) | 2,736.0 |
a. Public sector | 101.2 |
b. Private sector | 2,634.8 |
3. Other Liabilities | 240.1 |
D. Private Sector | 12,276.9 |
1. Non guaranteed debt | 12,276.9 |
a. Loans | 9,298.1 |
i. Long term (>1 year) | 9,129.0 |
ii. Short term (<1 year) | 169.2 |
b. Trade credits | 2,343.0 |
c. Other debt liabilities | 635.8 |
E. Debt liabilities to direct investors - Intercompany debt | 4,674.9 |
Total external debt | 131,159.1 |
Public external debt - excluding foreign exchange liabilities | 87,758.2 |
Public external debt including PSEs | 107,761.3 |
Source: State of Pakistan report dated December 2023[16]
|
References
- ^ Fiscal Sustainability: A Historical Analysis of Pakistan’s Debt Conundrum. Macroeconomics: Monetary & Fiscal Policies eJournal. Social Science Research Network (SSRN). Accessed 15 January 2019.
- ^ "Pakistan faces daunting challenges as it enters 2022". www.geo.tv. Retrieved 2023-07-28.
- ^ "Pakistan faces daunting challenges as it enters 2022". www.geo.tv. Retrieved 2023-07-31.
- ^ a b c d e Younus, Uzair (October 29, 2018). "Pakistan's debt policy has brought us to the brink. Another five years of the same is unsustainable". DAWN.COM.
- ^ "External debt and liabilities swell to $115.7 billion". The News International. State Bank of Pakistan.
- ^ Khan, Furqan (2023-03-22). "The Geopolitical Framing of Pakistan's Economic Crisis". South Asian Voices. Retrieved 2023-03-24.
- ^ "China's Funding to Pakistan Stands at 30% of Foreign Debt". Bloomberg.com. 2022-09-02. Retrieved 2023-06-04.
- ^ a b "Pakistan's Debt and Liabilities-Summary" (PDF). State Bank of Pakistan.
- ^ "current debt crisis". 9 February 2023.
- ^ "bilawal's request to IMF". 8 February 2023.
- ^ "update". 3 February 2023.
- ^ O’Donnell, Lynne (2022-08-05). "Pakistan Is Drowning in Debt". Foreign Policy. Retrieved 2023-06-04.
- ^ Horowitz, Julia (2023-05-12). "Pakistan's political crisis will deepen its economic misery | CNN Business". CNN. Retrieved 2023-09-28.
- ^ Ali, Nadir (2023-03-22). "Price hike in Pakistan: the worst of all worries". Modern Diplomacy. Retrieved 2023-10-30.
- ^ a b c d Padmanabhan, Keshav (November 13, 2023). "How much debt is too much debt? Curious case of Pakistan's $69 billion Chinese debt trap". ThePrint.
- ^ a b "State Bank of Pakistan External Debt Report December 2023" (PDF).
- ^ "Is Pakistan falling into China's debt trap?". www.cadtm.org. 31 July 2023.