Govt Raises Rs3.4 Trillion through Sukuk and PIBs
Pakistan raises Rs3.4 trillion through Sukuk and PIBs in 2024 to restructure debt, following a shortfall in tax revenue and a drop in interest rates.
Debt Restructuring and Financial Strategy
In 2024, the Pakistani government raised Rs3.4 trillion through Sukuk and Pakistan Investment Bonds (PIBs) as part of its strategy to restructure its debt profile. The government raised Rs2 trillion via Sukuk auctions at the Pakistan Stock Exchange (PSX), and an additional Rs1.4 trillion through PIBs.
Impact of Interest Rates and Inflation
The government opted for long-term borrowing to meet its fiscal requirements, with banks increasingly interested in high-yield investments after interest rates were reduced from 22% to 15%. This move comes amid a relatively low inflation rate of 4.9%.
Sukuk Auction Results
The final Sukuk auction in December was particularly successful, raising Rs353 billion, primarily through 10-year bonds.
Increased Borrowing Amid Shortfall
Although the government initially planned to reduce borrowing, a shortfall in tax revenue led to an increased reliance on bank borrowing. The total amount raised through Sukuk and PIBs is expected to reach Rs3.7 trillion by the end of the year.
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