Govt Borrowed More Money From Banks This Fiscal Year Than Previous 2 Years Combined

The federal government borrowed Rs. 7.39 trillion from banks in 11 months of fiscal year 2024, exceeding the amount borrowed in the previous two fiscal years combined, according to the latest data by the State Bank of Pakistan (SBP). The government borrowed Rs. 7.16 trillion from banks in the previous two fiscal years, i.e., Rs. 3.72 trillion in FY23 and Rs. 3.44 trillion in FY22. Compared to the combined borrowed amount of FY22 and FY23, the federal government has borrowed Rs. 224 billion more in 11MFY24 than the total amount borrowed in the past two fiscal years. Meanwhile, the government has paid back Rs. 764 billion net loan to SBP during the period in review. It is pertinent to mention here that the government can’t borrow directly from the central bank under the mandatory condition of the International Monetary Fund. As hinted earlier, government borrowing from scheduled banks in the current fiscal year has more than doubled the Rs. 3.7 trillion debt raised in the entire FY23. Overall, net government sector borrowing for budgetary support totaled Rs. 6.36 trillion in 11MFY24 against Rs. 3.75 trillion in FY23. The current sum has already surpassed the total amount borrowed by the federal government in the past.