The government, however, claimed that this was in line with the budget deficit financing as the government financed around 71 percent of its budget deficit from domestic sources while the rest of the budget deficit was financed through external sources.
The policy says the public debt was Rs 22,059 billion while total government debt was Rs 20,193 billion at end of September 2017. Gross public debt increased by around Rs 652 billion during first quarter of 2017-18. Out of this total increase, increase in domestic debt was Rs 521 billion while government borrowing from domestic sources for financing of fiscal deficit was Rs 433 billion.
The differential is mainly attributed to increase in government credit balances with the banking system. Similarly, external public debt recorded an increase of around Rs 131 billion which was predominantly driven by translational losses on account of appreciation of the international currencies against the US dollar and depreciation of Pak rupee against the US dollar, the policy said.
In US dollar terms, external public debt increased by around $0.9 billion during the first quarter of 2017-18 and recorded at $63.4 billion at the end September 2017. The government mobilized $1.5 billion during the first quarter of 2017-18, mainly from multilateral sources ($642 million), commercial loans ($472 million) and bilateral sources contributed $354 million (mainly from China amounting $317 million). The government also repaid $1.35 billion during the first quarter of 2017-18.
The policy statement also says that External Debt and Liabilities (EDL) stock stood at $83 billion at the end June 2017 out of which external public debt was $62.5 billion. The EDL increased by $9 billion out of which external public debt contributed $4.8 billion during 2016-17.
The external public debt servicing went up by 48 percent to settle at $6.44 billion during 2016-17, compared with $4.34 billion during the preceding fiscal year, the policy said. The policy says that external public debt repayment obligations for Pakistan are not more than an average of $5 billion per annum until 2022. Keeping in view the track record of the country, this amount of repayments should not raise any concern as Pakistan has successfully met repayment obligations even with much lower volume of foreign exchange reserves, it claims.
During first quarter of 2017-18, the government issued fresh/rollover guarantees aggregating to Rs 60 billion while outstanding stock of the government guarantees at end September 2017 amounted to Rs 999 billion, it says.