Islamabad: Pakistan is set to face a burden of Pakistani Rupees (PKR) 7.3 trillion in the next fiscal year, as interest payments on domestic and foreign debt continue to increase, The Express Tribune reported.

Initially, the Pakistani government had budgeted PKR 3.9 trillion to cover markup on loans for the ongoing fiscal year 2022-23. However, revised estimates have revealed that the spending on interest payments rose to PKR 5.52 trillion.

The budget had allocated PKR 3.43 trillion for interest payments on domestic debt. However, the revised figures have shown that the actual amount reached PKR 4.7 trillion. Meanwhile, the Pakistan government had initially intended to spend PKR 510.9 billion on interest payments for foreign debt. However, the figure rose to PKR 7725.3 billion.

According to economists, the increasing debt servicing costs will place more pressure on Pakistan's foreign currency reserves. The interest payments for the fiscal year 2023-24 are projected to reach PKR 7.3 trillion, with PKR 6.43 trillion allocated for domestic debt and PKR 872.25 billion for foreign debt.

The Pakistan government anticipates external loans of PKR 6.8 trillion for the next fiscal year. Of this, PKR 52.4 billion is projected to be raised from project loans and PKR 771.3 billion is expected through programme loans, The Express Tribune reported.

During the ongoing financial year, Pakistan had expected to receive 5.5 trillion in external loans. However, revised estimates hint at a lower inflow of PKR 3.2 trillion. Although the Pakistani government had initially projected project loans of PKR 266.5 billion and programme loans of PKR 1.2 trillion for the ongoing financial year. However, the revised figures show revised expectations of PKR 400.2 billion for project loans and PKR 856.4 billion for programme loans.

As per the news report, IMF loans for budgetary support were evaluated at PKR 558 billion for the fiscal year 2022-23. However, the revised estimates show Pakistani government now expects to receive PKR 172.4 billion. Pakistan has expressed hope of receiving PKR 696 billion in IMF loans for the next financial year, according to The Express Tribune report.

Pakistan's hopes of getting an oil facility on deferred oil payment from Saudi Arabia have diminished. Pakistan had initially projected to receive PKR 148.8 billion in the ongoing financial year. However, the revised estimates reveal an expectation of PKR 194.788 billion. Moreover, no such facility is anticipated in the next financial year.

From the Islamic Development Bank, Pakistan had estimated receipts of PKR 223.2 billion for the outgoing year. However, the actual amount received by Pakistan was PKR 232.2 billion. Pakistan's government for the next financial year expects to receive PKR 145 billion, as per The Express Tribune report.

In order to address its financial requirements, the Pakistan government intends to raise PKR 435 billion through the issuance of Islamic bonds and Eurobonds in the next fiscal year, as per the news report. However, the Pakistan government did not receive any funds from Sukuk issuance according to the revised estimates, The Express Tribune reported.