The inflation level rose by a whopping 36.4 per cent in the year in April, driven mainly by food prices. Pakistan, currently in the throes of a major political as well as economic crisis, is grappling with high external debt, a weak local currency and dwindling foreign exchange reserves. "Interest on loans, mainly local debt, has more than doubled in two years," he said, adding that the growing burden is preventing the government from spending on health, education and infrastructure. On the other hand, domestic debt servicing is becoming a huge challenge for the country given that interest rate has climbed to an unprecedented level amid record-high inflation.Īccording to Topline Securities CEO Mohammed Sohail, the mark-up expense in 2023-24 will alone be more than the federal budget of 2020-21. On the one hand, Pakistan is battling a prolonged balance-of-payments crisis, with foreign exchange reserves covering only a month's import bill. Other major contributors to the domestic debt were short-term loans (Rs 7.2 trillion) and unfunded debt (Rs 2.9 trillion) that included money borrowed through National Savings Schemes.įunds obtained through federal government bonds rose 31.6 per cent from a year ago while the increase in the stock of short-term loans remained 29.4 per cent.
Within the domestic debt, the largest share was of the federal government bonds that represented almost Rs 25 trillion worth of loans.
There was no change in the external debt figure from a month ago. On an annual basis, the increase in external debt remained 49.1 per cent, the State Bank of Pakistan (SBP) data showed.
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