Finance ministry says Rs10.1trn SOE debt is not fresh bank borrowing

The Finance Division has pushed back against a media report claiming state-owned enterprise debt had climbed to Rs10.1 trillion, Business Recorder reported. In a clarification issued on Thursday, the ministry argued that the report set two datasets side by side even though they measure different things. It warned that the comparison could mislead readers into believing state firms added Rs1.3 trillion in new borrowing.

The Rs10.1 trillion figure comes from the Central Monitoring Unit (CMU), which tracks the total interest-bearing liabilities of federal SOEs for fiscal-risk purposes rather than fresh bank lending. The State Bank of Pakistan series, by contrast, counts only the borrowing that public sector enterprises take from the banking system, and that figure stands at Rs2.954 trillion. Within the CMU total, bank and private loans make up Rs3.102 trillion, while the rest mainly comprises government lending, foreign re-lent loans, accrued markup and rollover costs.

Fresh borrowing over the period was only about Rs164 billion, and the ministry said the rest of the rise from about Rs8.8 trillion reflects changes in legacy lending and accumulated markup. In the ministry's view, the headline and comparison were misleading, since they set a comprehensive fiscal-risk measure against a narrower banking-sector credit series. The CMU framework, it added, is intentionally built to give the government and CCoSOE a deeper view of SOE borrowings and their fiscal exposure.