The federal government has borrowed over Rs. 5.7 trillion from banks, official data from the State Bank of Pakistan (SBP) revealed.
The government has borrowed Rs. 5.74 trillion (cash basis) from the local banking sector during the first 10 months i.e. July 1, 2023, till April 19, 2024, a staggering 103 percent leap from Rs. 2.8 trillion debt was raised during the same period last year.
Meanwhile, the government has paid back Rs. 738 billion net loan to SBP during the period in review. It is pertinent to mention here that the government can’t borrow directly from the central bank under the mandatory condition of the International Monetary Fund.
The borrowing from scheduled banks in the current fiscal year has already surpassed the Rs. 3.6 trillion debt raised in the entire FY23. Overall, net government sector borrowing for budgetary support totaled Rs. 4.83 trillion in 10MFY24 against Rs. 3.75 trillion in FY23.
The net borrowing of the federal government to meet its financial requirements for running state affairs stood at Rs. 4.5 trillion in the period from July 2023 to April 19, 2024.
The current sum has already surpassed the total amount borrowed by the previous federal government in the past.
Meanwhile, financing from Islamic banks declined by 90 percent YoY from Rs. 448 billion in the entire FY23 to just Rs. 44 billion in 10MFY24. Islamic banking branches of conventional banks provided credit to the tune of Rs. 23.7 billion during the period in review compared to a negative impact of Rs. 425 billion in SPLY.
