Govt caught in a ‘double debt’ trap

The domestic debt of the central government increased by Rs537 billion in July, reflecting the surging expenditure of the state machinery. Experts in the media have been stating that heavy borrowing will be necessary due to a revenue shortfall that started from the first day of 2024-25. The country is caught in a double debt trap, with domestic and foreign debt servicing consuming almost all tax revenue, forcing the government to rely solely on borrowing to survive. Further details show that the country’s total debt rose to Rs69.604tr at the end of July from Rs68.914tr in June, a rise of Rs690bn in a month.