In a significant development, the federal government has established a new precedent by accessing loans amounting to a staggering Rs6 trillion from banks within a span of 10 months. This revelation comes from the latest data divulged by the State Bank of Pakistan (SBP), indicating that the government procured 5.96 trillion rupees (on cash basis) from the domestic banking sector. This borrowing spree occurred between July 1, 2023, and April 26, 2024, showcasing a remarkable surge of 124% compared to the corresponding period in the previous year, where loans amounted to 2.66 trillion rupees.
It’s noteworthy that during this timeframe, the government managed to repay a net loan of Rs735 billion to the State Bank. This repayment underscores the adherence to regulations outlined by the International Monetary Fund (IMF), which strictly prohibits direct borrowing from the central bank.
Furthermore, the loans secured from scheduled banks in the ongoing fiscal year have already surpassed the total borrowing of Rs3.7 trillion recorded in the entire financial year of 2023.
Delving into the broader financial landscape, the cumulative net debt of the public sector, earmarked for budgetary support, amounted to Rs5 trillion during the initial 10 months of FY2020-24. This figure marks a notable increase from the Rs3.74 trillion recorded in the fiscal year 2023, signifying the evolving fiscal dynamics and the government’s financial strategies.
