Rs7.2tr added to debt from Jul-Jan

The coalition government has managed to add a net Rs7.2 trillion to the debt pile in only the first seven months of this fiscal year – an average of Rs34 billion per day. The accumulation of debt is now nearly three times more than the gap between federal income and expenditures. The State Bank of Pakistan (SBP) on Tuesday released the central government’s debt bulletin until January 2023, showing the adverse impact of the steep currency devaluation on debt. Federal government’s debt increased to nearly Rs55 trillion as of end-January – a surge of Rs7.2 trillion from the period between July 2022 to January 2023, according to the SBP statement. The debt burden increased at a pace of 15% during this period, which for a country like Pakistan is entirely unsustainable. The development came amidst disclosure that the net federal income dropped by Rs200 billion to Rs400 billion less than the total interest expenses. For the current fiscal year, the net federal income is estimated at Rs5 trillion while the cabinet last month approved a Rs5.2 trillion revised interest expenses bill for fiscal year 2022-23, ending in June. This is the first time that the net income is even less than the cost of debt servicing. Now, the entire defence budget and civilian government expenses are being covered through fresh loans. The net income is calculated after payment of provincial shares in the federal taxes.