Pakistan’s foreign, domestic debts and liabilities swell to Rs11.99t

The previous financial year, 2010-11, saw the resource-constrained Pakistan’s accumulative domestic and foreign debts and liabilities ballooning to Rs11.997 trillion or over $139.23 billion.
This figure represents a growth of 17.3 per cent or Rs1.776 trillion when compared with Rs10.221 trillion or $118.865 billion, when converted into dollars applying the State Bank’s weighted average customer exchange rates, the country owed to its debtors at home and abroad during FY10.
These figures have taken the country’s total debts and liabilities to an alarming 66.4 per cent of its GDP (gross domestic product) which during FY11 stood at Rs18.062 trillion against FY10’s Rs14.836 trillion. Last year when the foreign financing remained dismal mainly for geo-strategic reasons, the funds-starved government borrowed extensively to from the domestic sources, led by the risk-averse commercial banks, to finance its ever-increasing budgetary requirements.
The State Bank data shows that the government’s domestic debts during FY11 aggregated to Rs6.017 trillion, Rs1.363 trillion more than last year’s Rs4.654 trillion. FY09 had seen the government borrowing Rs3.860 trillion under the same head. Total public debts of the government in FY11 crossed the ‘Rs10.859 trillion’ mark compared to the Rs9.107 trillion it had raised during FY10. Of the total public debt, domestic debt rose to Rs6.017 trillion from FY10’s Rs4.654 trillion, external debt to Rs3.987 trillion from Rs3.667 trillion, debt from the International Monetary Fund (IMF) increased to 768.7 billion from Rs690 billion while other external liabilities, however, declined to Rs86 billion from Rs95.9 billion of last year.
During the year under review, total public debts amounted to 60.1 per cent of the country’s GDP, show the SBP statistics. Total external debts and liabilities of the government climbed up to Rs5.169 trillion against FY10’s Rs4.777 trillion. The government’s borrowing for commodity operation and the loss-making Public Sector Enterprises (PSEs) stood at Rs9.2.1 billion against Rs896.1 billion of the preceding year.
The “guaranteed” and “non-guaranteed” debts and liabilities showed a mixed trend with the former shrinking to Rs406.7 billion from Rs428.2 billion and the latter increasing to 495.4 billion from the previous year’s Rs467.9 billion, respectively.
While the chances for foreign financing are dimming with the straining of Pakistan’s bilateral ties with its largest American donors, economic managers have declared to rely on the domestic sources, none other than the banks.
No matter which source, the uncontrolled borrowings by the resource-constrained and calamity-hit government, the analysts warn, would widen the fiscal deficit besides leading to other negatives like hike in an already double-digit inflation. Pakistan’s current account deficit, during July-September FY12, rose to 2 per cent of the GDP and widened by over 102 per cent or $612 million to $1.209 billion against a deficit of $597 million the country had faced during the same quarter in FY10. The widening of the gap, the analysts believe, is attributable to a noticeable deficit of 35 per cent or $1.045 billion in the country’s trade balance.