KARACHI: Ahead of the upcoming general elections, the government’s borrowing from the State Bank of Pakistan (SBP) has soared to touch Rs1.43 trillion for the just concluded the financial year 2017-18.
The central bank on Friday released figures pertaining to government borrowing for budgetary support purposes, registering an increase of 58.5 percent for FY18, reported Express Tribune.
The government has been on the lookout ahead of general elections to finance projects announced in the budget for the just concluded FY18.
And higher borrowing highlights budget deficit has crossed the target 4.1 percent of gross domestic product (GDP) and could result in raising the inflationary pressure in the country’s economy.
For FY18, the government’s borrowing touched Rs1.43 trillion for FY18 compared to Rs907.8 billion in FY17.
To finance projects, the government has increased its borrowing for various constituencies before the elections to bolster its vote bank.
In wake of commercial banks decreasing their lending in anticipation of a rise in key interest rate going forth, the budgetary borrowing has exhibited a rise.
According to SBP, the government retired (net) Rs76.75 billion during the outgoing FY18 against Rs178.39 billion in FY17.
Collectively, the government obtained loans of Rs1.36 trillion from commercial and central banks during FY18, registering a rise of 25 percent against Rs1.08 trillion in FY17.
