Pakistan federal government’s debt surges to a shocking record high of PKR ( Pakistan’s currency) 70.36 trillion, new challenges arise for the nation amid alarming concerns about the country’s economic stability.
According to the State Bank of Pakistan, federal debt increased by PKR 1,448 billion within mere two months of the current fiscal year, with an addition of PKR 739 billion in August alone.
From September 2023 to August 2024, this debt rose by a staggering PKR 6,392 billion and by August 2024, domestic debt accounted for PKR 48,339 billion, while external debt stood at PKR 22,023 billion.
Amid Pakistan’s continuous struggle to grapple with economic challenges, this huge rise in government borrowing has raised concerns about the country’s fiscal health.
In recent advancements to tackle the ongoing economic crisis, the IMF approved a new bailout package of $7 billion for Pakistan on September 26, as per ARY News. The finance ministry wrangled for months with IMF officials to unlock this loan.
It authorizes the immediate disbursement of the first loan tranche of under $1.1 billion and is expected to be the last such loan, “This program should be considered the last program,” the Pakistan PM said in July when the loan deal was agreed.
This latest loan is the 25th since independence in 1947 and marks the highest number of such programs by any country.
Last year, Pakistan came to the brink of default as the economy shriveled amid political chaos, monsoon floods and decades of mismanagement, as well as a global economic downturn.
However, the government was saved by last-minute loans from friendly countries as well as an IMF rescue package, but its finances remain in dire straits, with high inflation and staggering public debts.