Massive funding requirements increased government borrowing by 259 percent in the eight months of the current fiscal year, highlighting the coalition’s challenges.
According to the latest data published by the State Bank of Pakistan (SBP), the government borrowed a total of Rs. 2.6 trillion from the banking system, including Rs. 2 trillion from commercial banks and Rs. 597.43 billion from the central bank between July 1, 2022, and March 11, 2023, to cover the budget deficit.
The federal government’s borrowing from scheduled banks for budgetary support increased by 253 percent, or Rs. 1.437 trillion, to Rs. 2.006 trillion in March 2023, up from Rs. 568.23 billion in June 2022.
The federal government’s borrowing from the SBP for budgetary support increased by 285 percent, or Rs. 442.4 billion, from July 1 to March 11, 2023, compared to Rs. 155 billion in the previous fiscal year.
Provincial governments returned a significant amount to the SBP and scheduled banks in opposition to the federal government. During the review period, the Balochistan government retired Rs. 29.651 billion, the Khyber Pakhtunkhwa government retired Rs. 19.699 billion, the Punjab government retired Rs. 191.261 billion, and Sindh repaid Rs. 5 billion to the SBP.
The federal and provincial governments borrowed Rs. 2.2 trillion from the domestic banking system for budgetary support in 8MFY23 compared to Rs. 243.4 billion in 8MFY22.
Total borrowing for budgetary support reached Rs. 20.7 trillion in the second week of March, up from Rs. 18.528 trillion at the end of June 2022.