Tag: Borrowing Trends

  • Govt’s debt rises to Rs5.53 trillion with recent Rs35.4 billion borrowing

    Govt’s debt rises to Rs5.53 trillion with recent Rs35.4 billion borrowing

    The government of Pakistan has secured an additional debt of Rs35.4 billion during the week ending on May 24, 2024, bringing the total net borrowing for the ongoing fiscal year 2024 to Rs5.53 trillion, according to the latest estimates from the central bank.

    Government borrowings this fiscal year have consistently outpaced those of previous years, indicating a persistent reliance on external financing. The borrowing is classified into three primary categories: budgetary support, commodity operations, and other purposes.

    For the week in question, net borrowing for budgetary support amounted to Rs24.52 billion, while loans for commodity operations totaled Rs13.07 billion. Conversely, a net amount of Rs2.19 billion was repaid under the “others” category.

    Cumulatively, for fiscal year 2024, borrowings for budgetary support have reached Rs5.68 trillion. In contrast, there has been a retirement of Rs149.47 billion in loans for commodity operations and Rs5.48 billion for other categories.

    The principal sources of financing for budgetary support are the State Bank of Pakistan and scheduled banks. This fiscal year, the government has repaid a net total of Rs1.07 trillion to the central bank. This repayment includes Rs598.84 billion by the Federal Government, Rs423.28 billion by the Provincial Government, Rs38.19 billion by the AJK Government, and Rs5.16 billion by the GB Government.

    On the other hand, scheduled banks have lent a net total of Rs6.75 trillion. The Federal Government borrowed Rs6.9 trillion from these banks, while the Provincial Government retired Rs151.49 billion.

    This pattern of borrowing underscores the government’s heavy dependence on domestic financial institutions to meet its budgetary needs amidst ongoing economic challenges.

  • Pakistan’s debt climbs by Rs276.55 billion to Rs4.78 trillion

    Pakistan’s debt climbs by Rs276.55 billion to Rs4.78 trillion

    Pakistan’s government incurred an additional debt of Rs276.55 billion during the week ending April 26, 2024, according to the State Bank of Pakistan’s weekly report.

    This brings the total net borrowing for the current fiscal year to a staggering Rs4.78 trillion, underscoring a trend of elevated borrowings compared to previous years.

    The government sector’s borrowings are categorised into three main segments: budgetary support, commodity operations, and others.

    During the latest week, the bulk of the borrowing went towards budgetary support, which accounted for Rs230.84 billion.

    Meanwhile, commodity operations contributed Rs45.76 billion to the debt increase, while the “others” category saw a retirement of Rs54.82 million.

    Looking at the cumulative figures for the ongoing fiscal year, budgetary support borrowings have now reached Rs5.07 trillion, with commodity operations showing a net retirement of Rs283.57 billion, and others indicating a net retirement of Rs2.64 billion.

    The government’s financing primarily comes from two sources: the State Bank of Pakistan (SBP) and scheduled banks.

    This fiscal year, the government has paid off a net sum of Rs735.22 billion to the SBP, with the Federal Government contributing Rs425.15 billion to the total.

    Provincial governments collectively retired Rs294.54 billion, while the governments of Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) retired Rs17.89 billion and borrowed Rs2.36 billion, respectively.

    In contrast, scheduled banks have lent out a net total of Rs5.8 trillion. Of this amount, the federal government borrowed Rs5.96 trillion, while the provincial governments retired Rs159.99 billion.

    These figures point to the government’s continued reliance on borrowing to manage fiscal operations.

    Analysts are concerned about the sustainability of this trend, suggesting that it could pose risks to the country’s economic stability if not carefully managed.

  • Pakistan’s debt burden surges by Rs14,506 billion in one year

    Pakistan’s debt burden surges by Rs14,506 billion in one year

    Pakistan’s international debt burden has continued its ascent, soaring to a staggering Rs63,966 billion as of the conclusion of August 2023.

    In a recent briefing session focused on the nation’s debt situation, it was disclosed that foreign debt had surged to $24,174 billion by the end of August, while local debt had concurrently reached Rs39,791 billion.

    The data presented during the briefing demonstrated a substantial increase of Rs14,506 billion in total loans over the past year. 

    It’s worth noting that in August 2022, the loan volume was a more modest Rs49,571 billion. During that period, the foreign debt stood at $18 trillion, and the local debt was at Rs32,152 billion.

    Prior to this development, the International Monetary Fund (IMF) had demanded a tax collection plan of Rs6,670 billion from Pakistan by June 2024. 

    An IMF review mission arrived in Pakistan to assess the country’s economic performance during the initial three months of the current fiscal year, spanning from July to September.

    The IMF has insisted on a comprehensive tax collection report from all sectors as part of its projection report. 

    Negotiations for the next $700 million tranche commenced on Thursday.

    According to ARY News, reports indicate that the IMF team has emphasised the importance of the Federal Board of Revenue (FBR) achieving its tax collection revenue targets without any shortfall.

     Furthermore, the IMF team has called for a report from the FBR on the progress of tax cases pending in court.

    The FBR has shared details of one million new taxpayers added to the tax net with the IMF team, and the IMF has requested specific data on tax collection from various sectors. 

  • Govt’s borrowing soars to over Rs1.6 trillion in three months, marking a fivefold increase from last year

    Govt’s borrowing soars to over Rs1.6 trillion in three months, marking a fivefold increase from last year

    In the current fiscal year, FY24, the federal government’s net borrowing to meet its financial obligations for governing the nation amounted to Rs1.6 trillion.

    According to official data released by the State Bank of Pakistan (SBP), the government secured loans exceeding Rs1.6 trillion in cash from the domestic banking sector during the first quarter, up significantly from the Rs261 billion borrowed during the same period in the previous year.

    During this period, the government obtained a net loan of Rs98 billion from SBP. It’s worth noting that the government is obligated to adhere to International Monetary Fund regulations, which prohibit direct borrowing from the central bank.

    Additionally, the government raised Rs1.5 trillion from scheduled banks in the first quarter of FY24 (up to September 8) to address the budget deficit.

    The net borrowing by the government for budgetary support in FY23 totaled Rs3.74 trillion, marking an increase from Rs3.13 trillion in FY22.