The caretaker government led by Prime Minister Anwaarul Haq Kakar has set a record by borrowing nearly Rs4 trillion from banks thus far.
Despite exceeding revenue targets for the past six months, the economy, already burdened by substantial debt, is poised to witness an unprecedented surge in borrowing by the end of the fiscal year 2023-24 on June 30. The amount borrowed has already surpassed the total borrowed in the entirety of the previous fiscal year.
Data from the State Bank of Pakistan reveals that from July 1 to Jan 19, 2023-24, the government borrowed Rs3.99 trillion, marking a stark increase from Rs1.398 trillion borrowed during the same period last year—a surge of 185 per cent.
This spike in borrowing may seem perplexing, given the government’s ability to surpass revenue targets for half of the fiscal year. However, soaring inflation, averaging over 28 per cent in the first seven months of this fiscal year, has led to increased government spending. Consequently, the Ministry of Finance has found itself compelled to borrow more from banks to cover escalating expenses.
