KARACHI: The borrowing for budgetary support rose by 21 percent during a little over first two months of this fiscal year (FY23).
According to the State Bank of Pakistan (SBP), the federal and provincial governments borrowed Rs 58.11 billion during July 1, 2022 to Sep 2, 2022 for budgetary support from the domestic banking system compared to Rs 48.18 billion in the same period of last fiscal year (FY22), depicting an increase of Rs 10 billion.
With the current surge, the overall stocks of borrowing for budgetary support reached the Rs 18.586trillion mark as on Sept 2, 2022 up from Rs 18.528trillion at the end of June 2022.
During the period under review, the federal and provincial governments returned a significant amount to the SBP, while the federal government made borrowing from the commercial banks to finance the fiscal deficit.
According to SBP, the federal government’s borrowing for budgetary support from the SBP remained negative. The federal government retired some Rs 586 billion to the SBP during the first two months of this fiscal year as against borrowing of Rs 63 billion in the same period of last fiscal year.
SBP-held foreign exchange reserves decline $176mn to $8.62bn
However, during the period under review, the federal government’s borrowing from commercial banks sharply increased. The federal government raised some Rs 756 billion from the domestic banks during July 2022 to August 2022 as compared Rs 132 billion in corresponding period of last fiscal year, depicting an increase of 473 percent or Rs 624 billion.
Three provinces cumulatively retired some Rs 96 billion to the State Bank during July 1, 2022 to Sep 2, 2022. Government of Balochistan retired Rs 15 billion, Khyber Pakhtunkhwa some Rs 8 billion and Punjab government Rs 74 billion. During the period under review, the government of Sindh borrowed Rs 1.15 billion.
During the first two months of this fiscal year, the provincial governments also repaid Rs 3.03 billion as against the borrowing of Rs 13.2 billion. Net Government Sector Borrowings stood at Rs 48.833 billion during the first two months of this fiscal year 47.86 billion in the same period of last fiscal year (FY22).
Copyright Business Recorder, 2022
Comments
Comments are closed.