Govt to Spend Rs 7.3 Trillion on Loan’s Markup in FY 24
The markup on the domestic and foreign debt will swallow up Rs 7.3 trillion in the next fiscal year, 2023-24.
The government had budgeted Rs 3.9 trillion to pay markup on domestic and foreign loans in the ongoing fiscal year, 2022-23.
However, the spending on paying markup went up to Rs 5.52 trillion according to revised estimates.
The government had budgeted Rs 3.43 trillion to clear markup on domestic debt, but the amount rose to Rs 4.7 trillion according to revised budget estimates for the ongoing financial year, 2022-23.UAE Agrees to Rollover of $2b and $1b additional Loan
The government also budgeted Rs 510.9 billion for markup on foreign debt, but it increased to Rs 7725.3 billion according to revised estimates.
Pakistan’s interest payments on foreign and domestic debt will further increase due to the increase in loans.
Of the Rs 7.3 trillion earmarked for interest payments in FY24, Rs 6.43 trillion will be the markup on domestic debt, and Rs 872.25 billion will be the markup on foreign debt.
Economists believe that pressure will mount on the foreign currency reserves of the country with the huge debt servicing cost.
Economic Aid Inflow
According to the budget documents, external loans for the fiscal year 2023-24 have been projected at Rs 6.8 trillion. The government has projected Rs 52.4 billion in project loans and Rs 771.3 billion in program loans.
It had anticipated an inflow of Rs 5.5 trillion in external loans in the outgoing financial year, but according to revised estimates, the inflow remained at a low level of Rs 3.2 trillion.
The government had projected project loans of Rs 266.5 billion, but now it hopes to receive Rs 400.2 billion during the ongoing financial year.
It had projected program loans of Rs 1.2 trillion, but now it expects to receive Rs 856.4 billion in the ongoing financial year.
The government had projected Rs 558 billion in IMF loans for budgetary support in the financial year 2022-23, however, it hopes to receive Rs 172.4 billion according to revised estimates.
It is expecting to receive Rs 696 billion from the IMF during the next financial year, 2023-24, for budgetary support.
Pakistan had projected to receive Rs 148.8 billion from Saudi Arabia on account of the oil facility on deferred oil payments in the ongoing financial year. However, it now expects to get Rs 194.788 billion according to revised estimates.
However, it is not expecting any such facility during the next financial year.
The government is expecting Rs 588 billion on account of the ECO oil facility during the next financial year.
From the Islamic Development Bank, the government had estimated receipts of Rs 223.2 billion in the outgoing year, against which it received Rs 232.2 billion. It expects to get Rs 4.08 billion according to revised estimates and Rs 145 billion during the next financial year.
The government expects Rs 580 billion in new deposits from Saudi Arabia during the next financial year.
And Pakistan hopes for Rs 290 billion in new deposits from the UAE during the next fiscal year.
In the next year, Rs 435 billion is expected to be raised through the issuance of Sukuk (Islamic bonds) and Eurobond.
The government had expected to generate Rs 372 billion through the issuance of Sukuk, but it did not receive anything according to revised estimates.
The government had expected to generate Rs 1305 billion from commercial banks in the next financial year.
It expected Rs 1389 billion from commercial banks, but it received Rs 521.6 billion during the ongoing financial year
