KARACHI: The government borrowed around Rs500 billion from scheduled banks during July 1-14 period of the current fiscal year, but, at the same time, repaid Rs750bn to the State Bank of Pakistan.
The latest figures released by the central bank, on the one hand, shows an increase in the government borrowing but, at the same time, its ability to meet financial obligations – a position repeatedly presented by Finance Minister Ishaq Dar even before the $3bn deal, saying Pakistan would never default and had been able to repay all the loans on time.
As far as the government borrowing is concerned, there is a 218 per cent increase when compared to the same period last fiscal year with the lending from the scheduled banks reaching Rs499.46bn. The total borrowing in 2022-23 was Rs157.44bn.
However, the federal government retired a huge amount of Rs750bn to the SBP during the same period against Rs258bn last year, translating into a 190pc increase.
The increase in borrowing from the commercial banks reflects the fiscal deficit challenge which may further complicate the affairs during the current financial year which has just started.
For 2023-24, the government has set budget deficit target of 6.54pc, as Dar in his budget speech had stated that the government had prepared “a responsible budget, not an election budget”.
