This equals 81% of the original annual debt servicing budget. There was also an increase of 70% in the cost of interest payments on the federal government’s debt stock in just eight months. The more alarming fact, however, was that debt servicing was Rs9 billion more than the federal government’s net income during the same period. Now though, the income does not to be sufficient even to meet debt servicing costs – a fact that exhibits how the country is stuck in a trap and cannot make an exit without restructuring, both its domestic and external, debt. Pakistan has informed the IMF that the cost of debt servicing may rise to nearly Rs5.2 trillion in this fiscal year, equalling more than half of this year’s total budget of Rs9.6 trillion.

Source: The Express Tribune March 19, 2023 19:50 UTC