KARACHI – Every Pakistani citizen now owes R302,000 to national and international lenders, as menace of decades old debt continues to climb higher, pushing the nation to over 242 million saw rising expenditure.
As per latest report from Finance Ministry, per capita debt spread to nearly Rs302,000 by the end of the last fiscal year, growing at a rapid pace of two digits. The report reveals that incumbent government failed to keep the budget deficit within the legally mandated limit, with the federal budget deficit surpassing the legal cap by more than double, reaching Rs. 7.7 trillion or 7.3% of the GDP, instead of the required 3.5%.
The financial policy statement highlights that per capita debt burden increased by Rs30,690, a rise of over 11pc, during the last fiscal year. The government is legally bound to submit a policy statement to the National Assembly by the end of January.
Despite efforts to control government spending, the report mentioned major rise in public debt, driven by higher interest payments and the impact of exchange rate depreciation, pushing the total debt from Rs. 62.9 trillion to Rs. 72.3 trillion. As a result, the share of public debt in the economy decreased from 74.8% of GDP in June 2023 to 67.2% in June 2024.
The report also points out that government expenditures exceeded the budget estimates by 11.7%, mainly due to increased interest payments, though non-mark-up expenditures stayed within budget limits. On the revenue side, slight declines were observed, leading to a higher budget deficit target of 7.3% of GDP.
The development expenditures were initially projected at Rs. 1.14 trillion but were later reduced to Rs. 1.03 trillion due to cuts in the Public Sector Development Program (PSDP). In total, the government’s estimated budget stands at Rs. 9.415 trillion, with net revenues available to the federal government accounting for 97.5% of the budget estimates after transfers to provinces.
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