The federal government borrowed Rs 3.649 trillion from scheduled banks for budgetary support from July 1, 2023, to May 17, 2024, which is 116% above the borrowing during the same period of the last fiscal year.
According to the State Bank of Pakistan (SBP), this significant increase in borrowing was mainly due to slow foreign inflows and less-than-target revenue collection.
Overall, the government raised Rs 6.796 trillion from scheduled banks during this period, compared to Rs 3.146 trillion in the same period of the previous fiscal year (FY23).
During this period, the federal government repaid Rs 479 billion to the SBP against borrowing of Rs 173.5 billion.
As per budget documents, interest payments or debt servicing have risen from 85 per cent last year (FY23) to Rs 7.303 trillion for FY24, accounting for 55 per cent of total current expenditure.
In contrast, provincial governments repaid Rs 151 billion to commercial banks from July 1, 2023, to May 17, 2024, compared to borrowing Rs 5 million in the same period of the previous fiscal year.
Statistics showed that all provinces cumulatively repaid Rs 470 billion to the SBP.
The Balochistan government returned Rs 66.1 billion, Khyber Pakhtunkhwa repaid Rs 45.6 billion, Sindh repaid Rs 88 billion, and Punjab repaid Rs 270.5 billion to the SBP during the same period.
Additionally, the AJK government retired Rs 38.224 billion, and the Gilgit-Baltistan government borrowed Rs 1.482 billion during this period.
Meanwhile, on Wednesday, the SBP conducted an auction for short-term government papers, and the federal government borrowed another Rs 501 billion. Rs 165 billion was raised from the sale of 3-month T-bills with cut-off yields set at 21.0001 per cent, down by 60 basis points. Six-month T-bills had cut-off yields of 21.0000 per cent, down by 29 basis points, raising Rs 101 billion, and Rs 233 billion was borrowed from the sale of 12-month MTBs at 20.1004 per cent, down by 31 basis points.
In addition, Rs 421 billion was raised through the sale of long-term 5- and 10-year Pakistan Investment Bonds (PIBs) in an auction on Wednesday, May 29, 2024.
