Bank advances drop by Rs1.6tr in January-April

Bank advances sharply declined by Rs1.589 trillion during the January to April period of the current fiscal year, despite a notable reduction in interest rates, while bank investments in government securities have surged significantly over the same period. According to the latest data from the State Bank of Pakistan (SBP), total advances dropped from Rs14.727tr in January to Rs13.138tr by April 2025 — an 11 per cent fall amounting to Rs1.589tr. Advances, which represent lending to the private sector, are typically considered a key indicator of economic activity, whereas investments, mostly in government papers, are viewed as less productive in terms of real economic output. This decline is seen as a setback to the government’s stated goal of stimulating economic growth. However, economists are divided on the issue.