For financial support during this fiscal year (FY23), the cash-strapped federal government borrowed more than Rs2.6 trillion from the banking system.
The federal government’s borrowing for budgetary assistance grew by 259 percent to close the fiscal deficit, according to the State Bank of Pakistan (SBP). In comparison to the same period in the previous fiscal year (FY22), the federal government borrowed Rs2.6 trillion from the banking sector, comprising the SBP and commercial banks, between July 1, 2022, and March 11, 2023, an increase of Rs1.88 trillion.
According to analysts, the delayed foreign inflows forced the government to cover the budget deficit with increased borrowing from the domestic banking sector.
Although the government is working to release the promised foreign inflows, progress is still being made slowly. As a result, the federal government is raising a lot of money from the local banking sector.
A thorough study showed that the majority of the money was borrowed from banks during the review period. From Rs568.23 billion in June 2022 to Rs2.006 trillion in March 2023, the amount borrowed by the federal government for budgetary support from the scheduled banks increased by 253 percent, or Rs1.437 trillion.
Between July 1 2022 and March 11, 2023, the amount borrowed by the federal government from the SBP for budgetary assistance increased by 285 percent, or Rs442.4 billion, as opposed to Rs155 billion during the same time of the previous fiscal year.
