By Staff Reporter
KARACHI: Public finances deteriorated sharply in July, putting them on track for their worst year on record, the central bank’s latest data showed on Tuesday.
The public debt swelled 27 percent year-on-year to Rs50.5 trillion in July FY2023 on the government’s borrowing to plug the budgetary hole. The debt stood at Rs39.87 trillion as of July 31, 2021. It rose by 6 percent month-on-month. The debt was Rs47.78 trillion as of June 30, 2022.
The government, however, would further face intense funding pressure in months ahead to repair the damage done by the historic flood in the country.
Pakistan’s worst flood in decades, which has killed up to 1,300 people and made 33 million homeless, will compound economic problems for the nuclear-armed country. Unprecedented flash floods caused by historic monsoon rains have washed away roads, crops, infrastructure, and bridges across Pakistan.
The government estimated that the disaster may cost the cash-strapped nation over $10 billion. The finance ministry has sharply cut its economic forecast for the current fiscal year and signals its readiness to ease further if damage from the ongoing catastrophic floods proves more devastating.
The State Bank of Pakistan’s data showed a major portion of the debt is sourced from domestic debt, which stood at Rs31.13 trillion in July, compared with Rs26.82 trillion a year ago.
The long-term debt rose 25 percent to Rs23.77 trillion in July. The short-term debt was Rs7.30 trillion, compared with Rs7.74 trillion by the end of July. The permanent debt rose 25 percent to Rs20.5 trillion in July 2022 from Rs15.4 trillion in July 2021.
The government’s external debt stood at Rs19.37 trillion in July, 49 percent up from the year earlier.
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