The perennial economic woes

In eight months and one week of this fiscal year — between July 1, 2023, and March 8, 2024 — the federal government’s budgetary borrowings from commercial banks more than doubled to about Rs4.2 trillion from Rs2.01tr. Meanwhile, the private sector’s net borrowings slumped to Rs73 billion from Rs246bn. Want to know more about why banks and bankers generally remain happy with the government and vice versa? The current hybrid democratic model, with the powerful establishment fully involved in day-to-day governmental affairs, provides room for implementing tricky economic decisions like containing imports. Little wonder, then, that Pakistan’s current account deficit (CAD) in eight months of this fiscal year fell to $999 million from $3.846bn in the same period of the last year — thanks largely to contained imports.