Finance clarifies nature of Rs10.1trn SOE debt

Business Recorder reported that the Ministry of Finance and Revenue has said the Rs10.1 trillion figure, released by the Central Monitoring Unit of the SBP, should not be read as new borrowing from banks. The ministry issued a press release on Thursday responding to a media report on federal SOE debt, arguing that the report had set two data series side by side without matching their scope.

According to the ministry, the CMU measure covers all interest-bearing obligations of federal SOEs and is meant for fiscal-risk monitoring. The SBP series is narrower, tracking only credit extended to public sector enterprises by the banking system, which stood at Rs2.954 trillion. Bank and private loans make up roughly Rs3.1 trillion of the Rs10.1 trillion, while government lending, foreign re-lent loans, accrued markup and rollover costs form most of the remainder.

The ministry said the rise in the overall stock, from about Rs8.8 trillion to Rs10.1 trillion, does not mean SOEs took on Rs1.3 trillion of new debt during the period. Fresh loans totalled only about Rs164 billion, while the rest of the movement reflected changes in legacy government lending, foreign re-lent loans, and accumulated markup and rollover costs. It concluded that both the headline and the comparison were misleading.