Finance: Economic worries persist

During the last fiscal year, the government’s borrowings for budgetary support had almost doubled to Rs7.48 trillion from Rs3.75tr a year ago, according to the latest statistics released by the State Bank of Pakistan (SBP). Last year, the government kept borrowing excessively, chiefly to service old domestic debt and not to spend on the country’s development. During this fiscal year, we may see the same happening again. In just 40 days of the new fiscal year (between July 1 and August 9 2024) the government’s borrowings for budgetary support have increased more than 10 times to Rs556 billion, according to the SBP, from Rs51.2bn in the same period of the last year. Since the central bank has already started reducing interest rates, the cost of domestic debt servicing may remain lower this year than in the previous year.