Govt debt surges by Rs8tr last fiscal year

The central government debt surged by Rs8.07 trillion, or 13 per cent, during the previous fiscal year, bringing the total to Rs68.9tr by the end of June 2024, according to data released by the State Bank of Pakistan (SBP) on Thursday. The debt stock rose by 1.7pc in just one month, as it stood at Rs67.73tr by the end of May. The sharp rise in debt has exacerbated financial challenges for both the government and the public. The government now faces increasing difficulties in servicing its debt and funding development projects while citizens bear the burden of new taxes. Despite the mounting debt, the government has been unable to reduce its spending, which might have provided some relief to the public and allowed for development expenditures. The budget allocation for the Public Sector Development Programme (PSDP) has been repeatedly slashed to accommodate rising spending, contributing to economic contraction in FY23 and a modest growth rate of 2.4pc in FY24.