Along with worsening economic crisis, Pakistan’s debt surges by PKR 4,304 Billion

Pakistan’s economy has been rapidly heading South due to a combination of high inflation, political turmoil, and structural inefficiencies.

The inflation rate remains one of the highest in Asia, exacerbating public discontent and economic challenges.

To stem the crisis, Pakistan secured a $7 billion bailout package from the International Monetary Fund (IMF) in September 2024.

This was the country’s 25th loan from the IMF since independence in 1947, underscoring its dependency on international financial assistance.

Pakistan’s economic situation nosedived causing a substantial increase in government debt.

In the first eight months of the current fiscal year, the federal government’s debt surged by PKR 4,304 billion (PKR 36,548 Crores), bringing the total to PKR 69.114 trillion as of October 2024.

This rise is attributed mainly to domestic borrowing, which increased by PKR 4,556 billion, while foreign debt saw a slight reduction of PKR 251 billion during the same period.

Despite recent stabilization efforts, including a predicted economic growth recovery to 2.5% for FY24, concerns remain about long-term debt sustainability and economic reforms necessary for stability and growth.

The surge in Pakistan’s government debt highlights the ongoing economic challenges facing the country.

While immediate measures have been taken to stabilize the economy through international loans, significant risks persist regarding fiscal health and public unrest due to high inflation and unemployment rates.