Pakistan's Debt Challenge: A Rs49 Trillion Countdown to 2030
Pakistan faces a daunting financial landscape, with local debt projected to reach a staggering Rs49.6 trillion by 2030. This figure comes from a recent government report that delves into the country’s borrowing practices, highlighting loans sourced through investment bonds, treasury bills, sukuk, and savings schemes.
The repayment schedule paints a concerning picture for the next five years. In 2024 alone, the government is set to repay an unprecedented Rs13.3 trillion, followed by Rs12.7 trillion in 2025. The figures taper off in subsequent years, with Rs7.7 trillion due in 2026, Rs4.8 trillion in 2027, and Rs5.6 trillion in 2028. By 2029, the repayments will decrease to Rs4.2 trillion, culminating in Rs1.4 trillion in 2030.
Breaking down the sources of this debt, approximately 59% originates from Pakistan Investment Bonds, while 22% comes from treasury bills and 10% from sukuk bonds. The remaining debt is derived from National Savings Schemes and prize bonds.
On a more optimistic note, Pakistan’s economy recently experienced a boost, with a current account surplus of $75 million reported for August. This shift is largely attributed to a record surge in remittances from overseas Pakistanis, providing a much-needed lifeline. In July, the current account deficit had reached $246 million, making this surplus a significant turnaround that could help stabilize the economy. Experts view this increase in remittances as a crucial factor in bridging the trade deficit and achieving the recent positive economic shift.
