ISLAMABAD: The government has issued new guarantees worth Rs318 billion for various sectors of the economy during the first six months (July-December) of the current fiscal year, according to the latest debt bulletin released by the Ministry of Finance.
The ministry stated that “During 1HFY-25, the government issued new guarantees, including roll-overs of existing guarantees, aggregating to Rs318 billion. This constitutes 0.26 percent of GDP which is well below the flow ceiling of 2 percent imposed by the Fiscal Responsibility and Debt Limitation Act, 2005.”
Approximately 55 percent of the guarantees were allocated to power sector entities, followed by commodity operations at 20 percent. The significant increase from December 2023 to December 2024 is attributed to the inclusion of guarantees issued against commodity operation financing obtained by state-owned enterprises (TCP and Passco), which were previously reported separately in past reports.
Pakistan’s total public external debt stood at $84.6 billion as of December 2024. Loans from multilateral institutions, including the IMF, constituted 56 percent of this amount, while bilateral development partners accounted for 27 percent. These loans are primarily concessional in nature, featuring longer tenors and lower interest rates compared to commercial sources.
Bilateral deposits from China and Saudi Arabia represented 10 percent of the total external debt. These short-term loans, typically with one-year maturities, are obtained mainly for budgetary support. Loans from foreign commercial banks made up around 7 percent of the debt stock, characterised by short- to medium-term maturities (1-3 years) and market-based interest rates.
The government’s international capital market transactions, including Eurobonds and international sukuk, accounted for 8 percent of external debt. These instruments represent long-term debt with market-based interest rates. Other foreign inflows, such as Naya Pakistan Certificates, non-resident investments in government securities, and Pakistan Banao Certificates, constituted approximately 2 percent of the total.
The share of multilateral creditors increased from 53 percent to 56 percent year-on-year as of December 2024, while bilateral creditors’ share decreased from 31 percent to 27 percent during the same period. The major disbursements came from IMF programmes, with the World Bank and Asian Development Bank remaining the primary multilateral creditors.
External budgetary disbursements totaled $3.5 billion in the first half of FY25, including $1.8 billion from multilateral sources, $0.5 billion from commercial sources, $0.24 billion from bilateral development partners, and $0.93 billion from Naya Pakistan Certificates.
During the same period, external budgetary repayments amounted to $4.268 billion. The government repaid $1.661 billion in international commercial bank loans and bilateral loans, along with $1.094 billion in multilateral loans. China’s $1.0 billion SAFE deposits were rolled over for one year in July 2024, followed by a similar rollover of Saudi Arabia’s $3.0 billion deposits in December 2024.
Pakistan received the first tranche of $1.02 billion under the IMF’s $7 billion Extended Fund Facility programme. Unlike FY24, when net external flows contributed Rs321 billion to deficit financing, the first half of FY25 recorded a net outflow of Rs78.7 billion.