KARACHI: Loss-making public sector enterprises (PSEs) have borrowed a record Rs142.3 billion from banks in the ongoing fiscal year so far, the State Bank of Pakistan (SBP) data shows.
The borrowings increased despite credit to public sector enterprises during the same period a year ago was just Rs2.5 billion and the Shehbaz-led government announced austerity measures earlier this year to cut its spending.
The coalition regime has yet to devise any plan to get rid of the losses or the loss-making PSEs. The debts and liabilities of loss-making public entities reached 1.972 trillion by the end of December 2022, an increase of Rs187bn during a year.
The debts of the PSEs alone increased by Rs134.9bn to Rs1474.3bn during the first half of the current fiscal year.
The central bank’s first half-yearly report shows that Pakistan International Airline (PIA) was the biggest borrower with Rs186.6bn until the end of December.
The cost of bank borrowing is too expensive, particularly for the PSEs like PIA, which adds billions of rupees each year as losses to its outstanding debts. No data is available about foreign borrowing made by PIA.
The second-biggest outstanding debt was of the Water and Power Development Authority (Wapda), which rose to Rs71.9bn. Pakistan Steel owes Rs41.9bn in debt.
The government has borrowed 1.961tr from banks for budgetary support from July to March 3 this fiscal year.
The borrowed amount in 8MFY23 is almost three times Rs618.7bn, the amount it borrowed during the same period a year ago, the SBP data reveals.
