Big gap in bank loans to govt, businesses

Bank advances to the private sector were only Rs123.8 billion, much less than the record lending of Rs7.7 trillion to the government in the outgoing 2023-24. The fiscal year, which ends on June 30, witnessed record inflation and an unprecedented interest rate. This kept the private sector out of costly banking money, resulting in poor economic growth of 2.3 per cent for FY24. The economy contracted in FY23, as evidenced by the low borrowing of just Rs208.2bn throughout the fiscal year. The State Bank of Pakistan data showed that the private sector could borrow Rs123.8bn from July 1 to June 14, 2023-24, compared to Rs62.3bn in the same period of last fiscal year. However, at the end of FY23, the borrowing reached Rs208.2bn.