Either floods or debts, Pakistan is drowning. According to Arif Habib Limited, government debt soared to Rs.50.5 trillion as of July 2022 compared with Rs.47.8 trillion in Jun in 2022. The debt has been increased by 5.7 percent in the financial year to-date. On year-on-year basis (YoY), it grew by Rs. 10.6 trillion, showing an increase of 26.7 percent as compared to last FY.
— Shahid Ali Habib (@ShahidAliHabib1) September 6, 2022
The coalition government took massive loans amounting to Rs.6700 billion for 3 months period from April to June in last FY, marking the highest quarterly increase of loans in the past 3 years.
Read more: Pakistan caught in a serious debt trap
Major contribution is of external debt which has soared by 48.5 percent on YoY basis from Rs.13 trillion in July 21 to Rs.19.4 trillion in July 22. On MoM basis, it increased by 15.7 percent from Rs.16.7 trillion in June to Rs.19.3 trillion in July 22.
Central government domestic debt increased by 16 percent on YoY basis from Rs. 26.8 trillion in July 21 to Rs.31.1 trillion in July 22. On MoM basis, it went up by 0.3 percent from 31 trillion in June to Rs.31.13 trillion in July 22.
As the country is facing massive shortage of dollars, foreign currency loans mounted by 46.5 percent on YoY basis from Rs.7 billion in July 21 to Rs.10 billion in July 22. On MoM basis, foreign currency loans increased by 16.7 percent from Rs.9 billion in June 22 to Rs.10 billion in July 22.
Be it economic or humanitarian crisis, Pakistan is facing major challenges. One after another shock has weakened the national economy. The direct consequence of the mounting debt pile is a huge increase in the cost of debt servicing. Total debt servicing increased from Rs4.6 trillion at the end of fiscal year 2021 to Rs5.5 trillion in the fiscal year 22.