Government Grapples with Surging Debts and Liabilities: PSEs’ Burden at Rs2,333bn

Surging Debts and Liabilities- The government is dealing with a big problem – Public Sector Enterprises (PSEs) owe a lot of money, and it’s getting worse. This means the government needs more money in the budget to pay off these debts.

Even though the government has been facing these economic challenges for a long time and also trying to fix this problem. The International Monetary Fund (IMF) is telling them to sell these businesses that are losing money, things are not getting better.

New information from the State Bank of Pakistan tells us that the money PSEs owe went up by a lot – 24.1% more in a year, reaching Rs2,332.9 billion in September.

In the year 2023, these businesses had a big problem – they owed 32.7% more money, a total of Rs573.6 billion, compared to the year before. The year before that, it went up by only 6.5%. Some of the big businesses losing money are PIA, Wapda, and others.

In the first part of 2024, there was a small increase of Rs4.8 billion in the money Public Sector Enterprises (PSEs) owe. This shows the government is trying to fix the problem, but it’s not easy. Even though they are trying to sell some of these businesses, it hasn’t worked out, and none of them have been sold yet.

In June 2022, the money these businesses owed was Rs1,393.4 billion. By June 2023, it went up to Rs1,687.2 billion and a bit more to Rs1,698.1 billion in September.

The money they have to pay for things they owe also went up to Rs640.9 billion in June 2023 from Rs361.1 billion in the same month the year before. But, in the first part of 2024, it went down a bit to Rs634.7 billion.

Until June, the money they owe compared to the total money the country makes (Gross Domestic Product or GDP) was 2.7%.

The three main businesses losing money are PIA, which owes Rs180.6 billion as of September 2023, Wapda at Rs92.6 billion, and Pakistan Steel Mills at Rs40.3 billion.

Even though other businesses that are losing money owe a lot more, we don’t know much about the government’s plan for them.

While the government is trying to sell some of these businesses, experts think it’s hard because not many people want to buy businesses that are losing money.

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