Every Pakistani now owes PKR 295,000 to national and international institutions, a courtesy to successive governments’ habit of running the state business on debt. The average debt per citizen in Pakistan has reached PKR 295,000, according to the Ministry of Finance. This significant increase in debt highlights the growing financial challenges facing the country. The Ministry of Finance has reported a significant increase in Pakistan’s total debt, which has surged by PKR 8.36 trillion, bringing the total to PKR 71.24 trillion. This marks a substantial rise from the previous fiscal year 2022-23 when the total national debt stood at PKR 62.88 trillion. The current debt level is equivalent to 67.2% of the country’s Gross Domestic Product (GDP). The domestic Pakistan debt has seen an increase of PKR 8.350 trillion, reaching a total of PKR 47.160 trillion. On the other hand, Pakistan’s external debt now stands at PKR 33.062 trillion. Out of that, the net government external debt has reached PKR 21.75 trillion. The documents also reveal an increase of PKR 292 billion in the debt owed to the International Monetary Fund (IMF), bringing the total IMF debt to PKR 2.33 trillion.

Composition of domestic debt:

The largest portion of the domestic debt of Pakistan is attributed to federal government bonds, which amount to PKR 32.8 trillion. This includes Pakistan Investment Bonds (PIBs), which have exceeded PKR 28 trillion, and Sukuk bonds, which total PKR 4.77 trillion. Additionally, prize bonds contribute PKR 345 billion to the domestic debt. The documents also indicate that foreign currency loans within the domestic debt amount to PKR 374 billion, and the Naya Pakistan Certificates account for PKR 84 billion. The rising debt levels highlight the financial challenges faced by Pakistan. With every citizen now effectively owing PKR 295,000, the government faces the daunting task of managing and reducing this debt burden. The increase in both domestic and external debt underscores the need for comprehensive economic reforms and prudent fiscal management to ensure long-term financial stability. The government’s strategy will need to focus on enhancing revenue generation, controlling expenditures, and fostering economic growth to mitigate the impact of this growing debt.

Credit: Independent News Pakistan