Pakistan’s Ministry of Finance and Revenue has clarified that the Rs10.1 trillion debt figure reported for federal state-owned enterprises (SOEs) represents their consolidated stock of interest-bearing obligations and should not be interpreted as fresh borrowing from banks. The clarification follows media coverage of the debt position, which compared figures compiled by the Central Monitoring Unit (CMU) of the Finance Division with data published by the State Bank of Pakistan (SBP). According to the ministry, the two sets of figures cover different categories of liabilities and serve separate reporting purposes. Comparing them directly without accounting for their differences in scope could give the impression that the entire increase in the reported debt stock resulted from new bank loans, which the ministry said was not the case.
In a press release issued on Thursday, the ministry explained that the CMU monitors the consolidated interest-bearing obligations of federal SOEs to assess fiscal risks associated with government-owned entities. The SBP data referenced in the media report, by contrast, measures a narrower category of borrowing and credit extended to public sector enterprises through the banking system. The ministry said that the difference in coverage means the two figures cannot be treated as equivalent measures of the same type of debt. While the CMU reported combined SOE debt of Rs10.1 trillion, the corresponding SBP figure for public sector enterprise bank debt stood at Rs2.954 trillion. The ministry stressed that the broader CMU total includes obligations that extend beyond conventional borrowing from commercial banks.
The Finance Division further clarified that the Rs10.1 trillion figure should not be described as the amount of bank borrowing by SOEs. According to the statement, bank and private-sector loans account for approximately Rs3.1 trillion of the consolidated debt stock. The remaining obligations principally comprise government lending, foreign loans re-lent through the government, accrued markup, rollover costs and other interest-bearing liabilities. These categories form part of the overall financial obligations recorded for federal SOEs, even though they do not all represent direct borrowing from the domestic banking system. The ministry’s explanation highlights the importance of distinguishing between the total outstanding stock of liabilities and the narrower amount of credit obtained from banks when assessing the financial position of government-owned companies.
The ministry also addressed the reported increase in the consolidated debt stock from approximately Rs8.8 trillion to Rs10.1 trillion. It said this rise should not be interpreted as evidence that SOEs obtained Rs1.3 trillion in new loans during the reporting period. According to the clarification, fresh or additional loans during the period amounted to approximately Rs164 billion. The difference between the change in the overall debt stock and the amount of new lending reflects the broader composition of SOE obligations, including changes in legacy government lending and foreign re-lent loans, as well as accumulated markup, rollover expenses and other existing interest-bearing liabilities. These factors can increase the total outstanding stock without an equivalent amount of new borrowing taking place during the same period.
The distinction is important for understanding the financial risks associated with state-owned enterprises and the government’s potential exposure to their obligations. A consolidated debt figure provides a broad view of interest-bearing liabilities that may affect public finances, while banking-sector credit data offers a more specific picture of the loans extended by financial institutions. Treating the two measures as interchangeable can distort assessments of borrowing trends, particularly when the movement in the overall stock includes accumulated financing costs and changes in older government-backed obligations. The ministry argued that the comparison in the media report did not adequately account for these methodological differences and could therefore lead readers to draw incorrect conclusions about the scale of fresh borrowing.
The clarification also draws attention to the role of the Central Monitoring Unit in tracking fiscal risks linked to federal SOEs. Monitoring a consolidated stock of interest-bearing obligations allows the government to assess financial exposures that may not be visible through banking-sector lending figures alone. Government loans, foreign financing re-lent to public entities and accumulated interest-related costs can all influence the total liability position. At the same time, banking-sector data remains relevant for examining how much public sector enterprises owe to financial institutions. The two measures provide different perspectives and are more useful when interpreted separately rather than compared as though they measure identical liabilities.
The Finance Ministry concluded that the headline debt figure and its comparison with the SBP series were misleading because they combined a comprehensive fiscal-risk measure with a narrower banking-sector credit measure. Its position is that the Rs10.1 trillion total reflects the accumulated stock of interest-bearing obligations rather than an equivalent amount of new bank borrowing. With fresh additional loans estimated at approximately Rs164 billion during the reporting period, the ministry said the increase in the overall stock must be understood in the context of legacy lending, foreign re-lent loans, accrued markup and other existing liabilities. The clarification seeks to provide a more accurate interpretation of SOE debt statistics and the distinction between total outstanding obligations and new borrowing.
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