KARACHI: Pakistan’s public debt and liabilities rose 9.5% to 42.4 trillion rupees at the end of January, central bank data showed on Tuesday.

Debt stood at 38.7 trillion rupees as of June 30, 2021, up 16% year-on-year. It was 36.5 trillion rupees at the end of January 2021.

A large portion of net borrowing from commercial banks leads to an increase in domestic debt, especially when the government does not borrow from the central bank under the International Monetary Fund program. Domestic debt stood at 27.4 trillion rupees at the end of January. It stood at 26.2 trillion rupees in June last year. External debt was 14.9 trillion rupees in January and 12.4 trillion rupees in June.

The increase in net borrowing to meet expenditure and the accumulation of foreign exchange reserves have increased the government’s financing needs.

Government financing needs remained on an upward trend due to spending related to the coronavirus pandemic. Weaker non-tax revenue growth is also contributing to the government’s increased borrowing requirements.

Data from the SBP showed that long-term debt reached 21.6 trillion rupees at the end of January, from 19.5 trillion rupees in June. Short-term debt was 537 trillion rupees, down from 6.6 trillion rupees at the end of January.

The government plans to raise 4 trillion rupees through auction of market treasury bills during the March-May period to fund the budget deficit, according to the auction schedule released by the SBP on the same day. .

The government is also expected to recoup 900 billion rupees from the sale of Pakistan Investment Bonds and 300 billion rupees from the auction of Ijara Sukuk variable and fixed lease rates during the reporting period.

At around 2% of GDP, the budget deficit in the first half of fiscal year 2022 was almost the same as last year.

Federal Board of Revenue (FBR) tax collections rose sharply by 30% year-over-year in fiscal year 2022 from July to February, in part due to a depreciated exchange rate and higher imports higher than last year as well as strengthened tax collection efforts, the SBP said. in its March monetary policy statement. This offsets the drop in non-tax revenue due to lower revenue from oil development royalties and increased spending, including grants, subsidies and the provincial public sector development program, he said.

While the primary balance posted a surplus of 0.1% of GDP in the first half of FY22, it was lower than the surplus of 0.6% of GDP in the same period last year, a- he added.