Finance: Alarm bells ringing

The present government had informed the nation last year that it would borrow Rs843 billion from banks during FY23 ending this month. But between July 1, 2022, and June 2, 2023 (28 days before the close of the year), the federal government has already borrowed Rs3.176 trillion from banks. This not only crowded out the private sector and contributed to tanking of the economic growth from 6.1 per cent last year to an estimated 0.3pc this year but also played a role in pushing inflation to a half-century high of 38pc. The State Bank of Pakistan continued pumping liquidity in the interbank market ahead of treasury bills and bond sales to ensure that banks had enough funds to lend to the government. This practice is inflationary as it contributes to growth in the money supply without any economic activity. In Pakistan, parliamentary democracy, in which the parliament has the power to question the government is too weak. The earlier parliamentary democracy regains its true spirit, and the media gets its constitutionally guaranteed freedom, the better we can handle our current economic crisis.