Pakistan coughed up more than four billion dollars in repayment on account of foreign debts during the first nine months of the current fiscal year, though the amount was at least 18 percent less than what the country paid in the same period last year.
The State Bank of Pakistan (SBP) data showed on Tuesday that the country’s external debt servicing dropped 18.74 percent to $4.308 billion during the July-March period of 2015/16 compared with $5.302 billion in the corresponding period last year.
The repayment included principal, interest payment and rolled-over amount.
The country’s outstanding stock of external debt and liabilities (EDL), however, rose to $69.558 billion till March 31, up 11 percent when compared with the EDL of $62.73 billion in the corresponding period of the last year. The EDL-to-GDP ratio also increased to 24.6 percent from 23.3 percent a year ago.
A government official said till June 30 there is no more repayment on the foreign debts is in pipeline.
The Economic Survey 2015/16 said the government may face challenges in servicing its external debts in the days ahead.
Though the significant portion of the International Monetary Fund (IMF) loans has already been repaid, the increase in debt servicing over the medium-term would offset the cushion, said the survey paper.
Notably, the maturity of 10-year Eurobonds ($750 million) issued in 2006/07 is due in 2016/17. Moreover, the repayment of rescheduled Paris Club debt under the official development assistance will start from 2016/17. The repayment of the ongoing external fund facility of the IMF will begin in 2017/18. The 5-year Eurobond of one billion dollar issued in April 2014 will mature in 2018/19. The five-year Pakistan International Sukuk of another one billion dollar issued in November 2014 will mature in 2019/20.
The central bank’s data showed that public external debt servicing registered a decline of 25 percent to $4,475 million in the fiscal 2014/15. In the preceding fiscal year, this amount stood at $5,995 million. The decline was mainly due to lower repayments to the IMF, which actually increased in 2013/14.
Finance ministry’s officials said the EDL was dominated by the public and publically-guaranteed loans, mainly obtained from multilateral and bilateral donors, as on March 31. This accounted for around 73 percent share in the total debts. Borrowing from the IMF contributed eight percent to the EDL stocks, while the private sector’s debts held four percent share in the total EDL.