By the end of August 2023, the federal government’s debt had skyrocketed to a startling Rs64 trillion, an alarming growth of nearly 29% in just one year. Concerns about fiscal sustainability have been raised by this disconcerting trend, and the damaging effects of a sharp currency devaluation coincide with the World Bank’s recent warning to Pakistan about the rising risks associated with its macroeconomic framework.
The federal government’s debt has increased by Rs14.5 trillion, or a significant 29.2% increase, according to a report released on Thursday by the State Bank of Pakistan (SBP). Although many people believe that this rapid debt growth is unsustainable, corrective actions to stop this worrisome trend have not been taken.
Significant fiscal expenses are associated with the rising debt stock.
