The government’s borrowing for budgetary support surged 108 per cent to Rs104 billion during the first five months of the current fiscal year to bridge the widening fiscal gap. according to a report by Dawn that cited data released by the State Bank of Pakistan (SBP).
Details show that the government borrowed Rs50bn in the same period of last fiscal year but the fiscal deficit remained high at 7.5pc of GDP or Rs3.41 trillion at the end of FY21.
Most of the liquidity has been accumulated from domestic sources like treasury bills and Pakistan investment bonds (PIBs) while the net outflow from National Savings Schemes (NSS) reduced the chance to borrow any higher amount.
The fiscal deficit for FY22 has been projected at 6.8pc of GDP but the macro indicators suggest it could be much higher than the target. In the budget FY22, the fiscal deficit was projected at Rs3.99 trillion. The sources of financing were Rs1,246bn from net external financing, Rs2,492bn from net domestic financing and Rs252 as privatisation proceeds.
