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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. Page 47
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