The caretaker government led by Prime Minister Anwarul Haq Kakar has set a new record by borrowing nearly Rs4 trillion from banks, making economic condition more vulnerable.
As the amount borrowed has already exceeded the total borrowed in FY23, the economy which is already crushed by a massive debt burden may experience an unprecedented surge in borrowings as of June 30 the last day of 2023-24.
According to the data by the State Bank of Pakistan, the government borrowed Rs3.99 trillion between July 1 and January 19, 2023-24 up from Rs1.398 trillion during the same time in previous year, indicating a rise of 185%.
The government has been receiving more revenue than expected for the past six months, which may be very unusual for many because it is desperately borrowing widely to meet expenses.
According to the sources from the Ministry of Finance, the government was able to increase revenue during the first seven months of the financial year due to average inflation exceeding 28%.
But the rising rate of inflation also led to higher spending, which has forced the ministry to get more bank loans.
The government is very much concerned regarding the costly borrowing because it has to pay 50% of the budget outlay due to debt servicing.
