March 28, 2023 (MLN): The government’s borrowing for budgetary support has reached a staggering Rs2.26 tr between July and March 11, driven by a massive borrowing of Rs1.98tr from banks, according to the data of SBP.
This represents a dramatic increase from last year's borrowing of only around Rs535 billion in the same period.
It seems that the government is robbing Peter to pay Paul, as it borrows from banks to meet its budgetary needs.
The economy is clearly feeling the pinch, with credit off take down significantly compared to last year. During the July 1 to March 11 period, companies borrowed only Rs248bn, down from around Rs911bn in the same period last year.
However, the public sector enterprises seem to be taking advantage of the situation, as their credit increased from Rs18bn in the same period last year to around Rs151bn.
The high level of borrowing is a cause for concern, as it could lead to inflationary pressures and a higher debt burden for the country.
