KARACHI: The government borrowed 16 per cent more from the commercial banks during the first 11 months (July-May) 2020/21, official statistics revealed.
The government borrowing from commercial banks increased to Rs2.435 trillion during July-May 2020/21, compared with Rs2.1 trillion in the same period of the last fiscal year, the data released by the State Bank of Pakistan (SBP) on Tuesday showed.
The federal government borrowed from the banking system to meet the budget financing through the sale of treasury bills and investment bonds.
During 2019/20, the federal government borrowed Rs2.468 trillion, which is almost equal to the borrowing made during the first 11 months of the current fiscal year.
The rise in borrowing from commercial banks can be attributed to the limitation imposed on the government for taking loans from the central bank.
The data also revealed that the government retired Rs1.556 trillion outstanding dues of the State Bank during the first 11 months of the current fiscal year, compared with Rs68.61 billion retired in the same period of the last fiscal year.
The SBP projected that the fiscal deficit would be up to 7.5 per cent for the outgoing fiscal year, compared with the actual target of 7 per cent.
The budget deficit during the first nine months of the current fiscal year stood at 3.6 per cent of GDP, or Rs1.652 trillion, the statistics released by the Finance Ministry showed.
Of the total fiscal deficit of nine months of the current fiscal year, the financing through domestic resources was Rs1.089 trillion.
Despite the interest of commercial banks in the government papers, the private sector credit off-take also registered an increase of 69 per cent during the first 11 months of the current fiscal year.
The commercial banks extend loans to the private sector worth Rs489 billion during the period under review, compared with Rs289 billion in the corresponding period of the last fiscal year.