ISLAMABAD, Pakistan: The National Assembly was informed on Thursday that the federal government has to return external loans worth US$ 28.2 billion by the Fiscal Year (FY) 2022-23.
Responding to a question by Pakistan Muslim League-Nawaz’s (PML-N) lawmaker Muhammad Afzal Khokhar, the Minister for Finance and Revenue apprised the House that besides the external loans, the government also intends to pay back Rs 12.261 billion domestic loans from FY 2019-20 to FY 2022-23.
The minister further told that the government intends to borrow Rs 1.9 trillion including Rs 0.8 trillion in domestic debt and Rs 1.1 trillion in external debt for the financing of its fiscal deficit from January to July 2020.
In addition, he told that the government borrowing requirement is dictated by the gap between revenue and expenditure. He added that the government borrowing is also required for resource-intensive infrastructure projects which facilitate economic growth and allow to achieve social development goals.
To another question asked by Shazia Marri of Pakistan People’s Party (PPP), the minister told that the total debt and liabilities increased by Rs 10.33 trillion during the FY 2018-19; however, it is important to highlight that the total debt and liabilities include government debt as well as borrowing of other sectors which is not the liability of the government of Pakistan such as Private Sector, Banks, foreign exchange liabilities etc.
The Minister for Finance and Revenue said that although the total debt and liabilities of the Country had exceeded the size of GDP at end June 2019; however, it is important to mention that the total public debt stood at 84.8 percent of GDP, thus remaining below the level of 100 percent as observed at start of the year 2000.
Furthermore, out of this increase of Rs 10.33 trillion in total debt and liabilities, the total public debt contributed Rs 7.75 trillion during FY 2018-19.
Component wise break-up of Increase in total public debt is as follow;
- Rs 3.44 trillion was for the financing of fiscal deficit;
- Rs 3.03 trillion was due to rupee depreciation;
- Rs 1.28 trillion was due to increase in cash balances of the government and accounting policy relating to long-term bonds.
Hence, the actual borrowing of the government was Rs 3.44 trillion during the FY 2018-19, the minister added.