According to official data from the State Bank of Pakistan (SBP), the federal government has secured Rs. 6 trillion in bank loans.
During the initial 10 months, starting from July 1, 2023, until April 26, 2024, the government has amassed a substantial Rs. 5.96 trillion in loans from the local banking sector, marking a remarkable 124 percent increase compared to the Rs. 2.66 trillion borrowed in the corresponding period last year.
During the same period, the government reimbursed Rs. 735 billion as net loans to the SBP. It’s worth noting that direct borrowing from the central bank is not permitted due to International Monetary Fund regulations.
In the ongoing fiscal year, borrowing from scheduled banks has exceeded the total debt raised in FY23, reaching Rs. 3.7 trillion. Overall, net government sector borrowing for budgetary support amounted to Rs. 5 trillion in the first ten months of FY24, compared to Rs. 3.74 trillion in FY23.
From July 2023 to April 26, 2024, the federal government’s net borrowing to sustain state operations reached Rs. 4.78 trillion, surpassing the total borrowing of the previous federal government.
In contrast, financing from Islamic banks experienced a significant 90 percent year-on-year decline, dropping from Rs. 448 billion in FY23 to only Rs. 34.8 billion in the first ten months of FY24. Islamic banking branches within conventional banks extended credit amounting to Rs. 33.8 billion during this period, compared to a negative impact of Rs. 425.6 billion in the same period last year.
