Govt borrows record Rs4.2tr

The government has set a record for borrowing from banks in the first six months of the current fiscal year, surpassing the total borrowing in the entire FY23. This intense borrowing has not only burdened the economy with debts but has also restricted the private sector’s access to banking funds. According to the latest data from the State Bank of Pakistan, the government borrowed Rs4.284 trillion from banks during July-Dec FY24, exceeding the total borrowing of Rs3.716tr in FY23. In the first six months of FY23, borrowing was limited to Rs280 billion, showing substantial growth in the second half of the same year. The banks in Pakistan have ample liquidity but are unable to utilise it, except for investing in government papers. The 22 per cent policy rate makes it impossible for the trade and industry to survive with these high returns on borrowed money.