According to official statistics from the State Bank of Pakistan (SBP), the federal government has borrowed more than Rs. 5.7 trillion from banks.
From July 1, 2023, to April 19, 2024, the government borrowed Rs. 5.74 trillion (cash basis) from local banks. This is a startling 103 percent increase in debt from Rs. 2.8 trillion raised during the same time previous year.
Throughout the period under review, the government has returned a net loan of Rs. 738 billion to SBP. It is important to note that, per International Monetary Fund regulations, the government is not permitted to borrow money directly from the central bank.
The amount borrowed from scheduled banks in the current fiscal year has already exceeded the debt generated for the whole FY23, which totaled Rs. 3.6 trillion. In all, the government sector borrowed Rs. 4.83 trillion for budgetary assistance in 10MFY24 as opposed to Rs. 3.75 trillion in FY23.
Between July 2023 and April 19, 2024, the federal government borrowed a total of Rs. 4.5 trillion to cover its operating expenses for state activities. The total sum borrowed by the previous federal government has already been exceeded by the present amount.
In the meantime, funding from Islamic banks fell from Rs. 448 billion over the whole FY23 to only Rs. 44 billion in the 10MFY24, a 90 percent YoY decrease. In comparison to a negative impact of Rs. 425 billion in SPLY, Islamic banking branches of conventional banks extended credit totaling Rs. 23.7 billion during the period under consideration.
