Key Takeaways
- The Ministry of Finance and Revenue clarified that Rs10.1 trillion debt reported by CMU of SBP does not represent fresh borrowing.
- The CMU data covers a broader scope of federal SOE debt, including government lending and foreign re-lent loans.
- Fresh loans during the period amounted to approximately Rs164 billion, not Rs1.3 trillion as suggested by media reports.
The Ministry of Finance and Revenue has clarified that the Rs10.1 trillion debt figure reported by the Central Monitoring Unit (CMU) of the State Bank of Pakistan (SBP) does not represent fresh borrowing from banks. The ministry issued a press release to address a media report titled 'SOEs’ debt soars to Rs10.1 trillion'.
According to the ministry, the CMU data is a broader measure that includes the comprehensive consolidated stock of interest-bearing obligations of federal State-Owned Enterprises (SOEs). This differs from the SBP’s narrower measure, which focuses on borrowing/credit of public sector enterprises from the banking system.
The ministry emphasized that the two data sets should not be mixed together, as they have different scopes, coverages, and reporting purposes. The SBP’s PSE bank debt is Rs 2.954 trillion, while the SOE combined debt is Rs 10.1 trillion as reported by CMU.
The ministry stated that bank/private loans account for approximately Rs3.1 trillion of the consolidated stock, with the balance comprising government lending, foreign re-lent loans, accrued markup/rollover costs, and other interest-bearing liabilities.
The increase in the consolidated SOE debt stock from approximately Rs8.8 trillion to Rs10.1 trillion does not indicate that SOEs raised Rs1.3 trillion of new debt during the reporting period. Fresh/additional loans during the period amounted to approximately Rs164 billion only.
The ministry further explained that the movement in the overall stock reflects changes in legacy government lending and foreign re-lent loans, together with accumulated/accrued markup, rollover costs, and other existing interest-bearing obligations.
The ministry stressed that treating the entire CMU figure as comparable to the SBP banking-sector series is methodologically incorrect. The increase in the consolidated SOE debt stock is due to various factors, not just new borrowing.
The ministry’s clarification aims to prevent the incorrect portrayal of the movement in the stock as fresh borrowing, which could lead to misleading interpretations of the financial health of federal SOEs.
