ISLAMABAD: The repayment of external debt servicing (principal and interest) by the Pakistan government increased to $15.1bn in 2021-22, 12% up YoY compared to FY20-21.
According to SBP’s latest data, in FY21 principal and interest payments amounted to $13.43bn whereas in FY20 and FY19 principal/interest payments stood around $14.57bn and $11.59bn respectively.
During three years and nine months of tenure, the PTI government paid $44.87bn as the principal amount of loans and interest. Whereas, in five years tenure of PML (N) principal and interest amount amounted to $33.363 bn.
Interestingly, in five years tenure of PPP government, principal and interest amount paid was low _ $24.306 bn. The data of the central bank shows that with the passage of time, the size of foreign loans/markup payment is increasing.
3QFY22. In 4Q of FY22 total external debt servicing stood at $4.2bn.
The increase in debt servicing costs is attributed to higher borrowings to plug the fiscal deficit and massive rupee devaluation during the period which increased the value of external debt.
Going by the SBP data, principal amount payments during FY22 totaled $12.1bn, a major chunk of which ($11bn) comes from the public debt particularly concentrated under the government debt head ($9.98bn). Interest payable on the principal of public debt totaled $2.3n. While the interest paid on the principal of total debt totaled $2.98bn, according to Mettis Global, a Karachi-based Fin-Tech company.
Furthermore, FY22, Pakistan paid $9.99bn and $1bn principal amount on government debt and on IMF loans respectively. Whereas $1.8bn and $140mn were paid as interest payments on the government’s loan and on loans from IMF.
Meanwhile, it is pertinent to mention that within government external debt, the major chunk of $5.1bn was paid on commercial loans and credits followed by $1.6bn on multilateral loans and $1bn on Euro/Sukuk global bonds as the principal amount.
Moreover, to meet foreign exchange liabilities, the government paid zero amount as a principal while $330mn retired as interest payments.
Debt servicing of the Public Sectors Enterprises (PSEs) during FY22 reached $278mn, soaring by 3% YoY.
Furthermore, the total debt servicing of the private sector (non-guaranteed debt) stood at $1.45bn in FY22, of which $974mn was retired as principal amount while $482mn was paid as interest.
