Govt borrowing exceeds two-year combined figure

The government’s borrowings in the first 11 months of the outgoing fiscal year have exceeded the combined figure of the two preceding fiscal years. This huge borrowing from banks was made when the interest rate was unprecedentedly high, at 22 per cent, indicating the size of debt servicing will enormously increase and exceed the budget estimates for the upcoming fiscal year. According to the SBP data, the government borrowed Rs7.39 trillion from July 2023 to June 7, 2024. There are still 23 days of borrowing to be reported. This was more than the government’s collective borrowings in FY23 and FY22, reflecting the high spending while the development budget was slashed to meet other expenses in the outgoing fiscal year.