Govt borrows Rs7.39 trillion in 11 months of FY2023-24 M Haris

The government’s borrowings have reached Rs7.39 trillion in the first 11 months of the outgoing fiscal year, exceeding the combined total of the previous two fiscal years.

According to data from the State Bank of Pakistan (SBP), the government borrowed Rs7.39 trillion from July 2023 to June 7, 2024, with 23 days of borrowing yet to be reported.

This figure is higher than the government’s total borrowings for FY23 and FY22 combined, reflecting high spending while the development budget was cut to meet other expenses in the outgoing fiscal year.

With interest rates at the highest level of 22%, this mammoth borrowing from banks indicates that debt servicing costs will substantially increase, and surpass budget estimates for the upcoming fiscal year.

In FY23, the government borrowed Rs3.72 trillion, and in FY22, Rs3.49 trillion, totalling Rs7.16 trillion, which is less than the Rs7.389 trillion borrowed in 11MFY24.

According to the budget document for FY24, the government will spend Rs7.21 trillion on domestic debt servicing and Rs1.04 trillion on foreign debt servicing, totalling Rs8.25 trillion.

For FY25, the government has allocated Rs8.736 trillion for domestic debt servicing and Rs1.04 trillion for foreign debt servicing, amounting to Rs9.77 trillion.