Private sector borrowings plunge 87pc

Bank advances to the private sector plunged by almost 87 per cent to Rs211 billion in FY23 against Rs1,612bn in the preceding fiscal year, reflecting the repercussion of record high interest rates and economic slowdown. The State Bank’s latest data issued on Tuesday revealed that the private sector did not borrow to invest in expansion as most of the borrowing was meant for short-term working capital. The entire fiscal year was marred with political and economic instability as a result the PMLN-led coalition government had to sharply trim its growth projection to a mere 0.29pc from the budgetary target of over 6pc for FY23. The conventional banks provided Rs171bn to the private sector in FY23 compared to Rs971bn in FY22. Advances by Islamic banks to the private sector also dipped to Rs126bn against Rs239bn in the preceding fiscal year.