Govt borrowed Rs8.3 trillion in FY24 from scheduled banks, SBP data shows

WEB DESK: In the fiscal year 2023-24, the government has significantly increased its domestic debt, reaching unprecedented levels.

According to the latest data from the State Bank of Pakistan (SBP), the government borrowed Rs8.3 trillion from scheduled banks. This marks a massive rise from the Rs3.6 trillion borrowed in FY23 and the Rs3.3 trillion in FY22.

Of the total Rs8.3 trillion borrowed, the Federal Government accounted for Rs8.56 trillion, while the Provincial Government managed to retire Rs261.27 billion. The primary sources of financing for budgetary support continue to be the SBP and scheduled banks.

According to Mettis Global, this fiscal year, the government paid off a net sum of Rs694.85 billion to the central bank, resulting in a net borrowing figure of Rs7.49 trillion. Government sector borrowings are categorised into three main areas: budgetary support, commodity operations, and other purposes.

When broken down, the net borrowing for budgetary support was Rs7.61 trillion. In contrast, Rs107.59 billion was retired from commodity operations, and Rs6.18 billion was retired from other obligations.

The surge in borrowing reflects the government’s increased reliance on domestic sources to finance its budgetary needs, highlighting the ongoing fiscal challenges faced by the country.

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