Karachi: A recently released report from State Bank of Pakistan (SBP) has revealed that borrowing from the private sector has surged by 126pc during the financial year 2016-17.
According to the SBP report, banks registered an increase in deposits during the FY 2016-17. The government’s borrowing from the central bank amounted to Rs1.23t, whereas it obtained loans worth Rs352b from commercial banks in the final quarter of FY 2016-17.
The surge in private sector borrowing saw 42pc of it being utilized for fixed investments in the first three quarters of the FY 2016-17. Borrowing in the trade segment had also risen, which facilitated the increase in private sector loans, the SBP said.
The government borrowed less from commercial banks this FY in comparison to previously which lent the former the flexibility in offering credit facilities to the private sector. SBP added that banks had sufficient liquidity available at their disposal as a result of high deposit galvanization.
The central bank added that the country had experienced a significant fall in provision of credit to the private sector as a percentage of GDP since 2009 onwards.
