Finance clarifies nature of Rs10.1trn SOE debt

The Ministry of Finance and Revenue has clarified that the reported Rs10.1 trillion debt figure of federal State-Owned Enterprises (SOEs) from the Central Monitoring Unit (CMU) of the State Bank of Pakistan (SBP) does not represent fresh borrowing from banks. The Ministry emphasized that this debt stock, reported by the CMU, is a broader measure of interest-bearing obligations of SOEs, encompassing government lending, foreign re-lent loans, accrued markup/rollover costs, and other existing interest-bearing liabilities.

The discrepancy arises from the comparison of this comprehensive stock with a narrower measure provided by the SBP, which focuses on borrowing/credit of public sector enterprises from the banking system. The Ministry stressed that the Rs10.1 trillion figure includes approximately Rs3.1 trillion of bank loans, with the remaining balance comprising various non-banking liabilities.

Consequently, the increase in the SOE debt stock does not equate to new borrowing; rather, it reflects changes in existing obligations. The clarification aims to prevent misleading impressions that SOEs raised a significant amount of new debt during the reported period.

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