KARACHI: The government borrowed Rs1.276 trillion from the State Bank of Pakistan (SBP) in less than two and half months (up to Sept 7) of this fiscal year compared to just Rs118bn in the corresponding period last year.
The central bank on Tuesday reported that during the first quarter of 2018-19, the government retired Rs1.202tr debt of commercial banks to keep them liquid to make financing available for the private sector.
Interestingly, the private sector’s borrowing during this period rose to Rs4.1bn against a net retirement of Rs100bn in the same period last year, indicating economic activities boosting up despite uncertainties related to general elections and formation of new government.
The State Bank also reported that borrowing by the public sector enterprises (PSEs) was abnormally high compared to the same period of last year. The PSEs borrowed Rs49.6bn against a net retirement of Rs25bn in corresponding period of last fiscal. In FY18, the PSEs borrowed Rs245bn.
The latest economic decisions taken by the new government on Tuesday could get a positive response if the decisions are helpful for the growth of the private sector.
The PTI government has already indicated to privatise loss-making PIA, Pakistan Steel, Wapda and Pakistan Railways, but didn’t come up with any clear-cut programme.
Published in Dawn, September 19th, 2018