Investor Presentaiton
D
Chapter VI - Debt, Pension and GPF Liabilities
ebt, pension and GP Fund involve major financial liabilities of the Government. As per the international good practice, the
Government specifically includes details of these liabilities in the white paper on budget to allow policy makers and legislators have
a close eye on them. If not managed properly, these liabilities can erode fiscal space and adversely affect the credibility of
budget.
Debt Stock
Punjab's debt levels are currently quite low when measured as percentage of its GSDP (Gross Sub-national Domestic Product)
or as a percentage of its annual revenue. In current scenario, when revenue receipts have been affected drastically due to
COVID-19 pandemic, the major challenge of the Province is to manage its debt operations to finance its large and growing
development needs without impairing its capacity to repay the debt.
Punjab's debt consists mainly of long-term foreign loans obtained on concessional terms from international institutions by the
federal Government and on-lent to Government of the Punjab. Government of the Punjab obtained multilateral loans from
international financial institutions and a few bilateral loans to support the development needs of the Province. The focus of external
financing remains in the areas of Education, Agriculture, Transport, Urban Development etc. Bifurcation of Punjab's total debt is as under:
Punjab's Debt Stock as of 30.06.2020
(Rs Billion)
Type of Loan
as at Jun '19
as at
Jun 20
% growth from
Jun 19
Rupee Value
growth from
Net New
Debt
Jun 19
Exchange
Rate Loss
(Gain)
iDomestic Loans
8.7
6.7
-22.1%
(1.9)
0
0
External Loans
945.3
938.8
-0.7%
(6.5)
(0.8)
(7.7)
Total
954.0
iv945.5
-0.9%
(8.5)
(0.8)
(7.7)
Debt stock as of Jun 20 (Table 6.1) shows a
decline of -0.9% (i.e. Rs.8.5 billion) with
respect to debt stock of Jun`19.
This negative growth is attributed mainly due to Pak Rupee appreciation against
foreign currencies i.e. PKR7.7 billion and remaining PKR0.8 billion is the net
addition of new loans in the portfolio of Government of the Punjab (GoPb)
against new as well as already contracted loans.
4.2%
Punjab's total Debt as
% of GSDP
2.3%
Punjab's total Debt as %
of National GDP
The size of Punjab's debt is quite low when measured
as a percentage of its Gross Sub-national Domestic
Product (GSDP) i.e. 4.2% and the ratio goes down when
debt stock is compared with national GDP.
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