Anwarul Haq Kakar’s interim administration broke all previous records by borrowing around Rs4 trillion from banks, further weakening the state of the economy.
By June 30, the last day of 2023–24, the economy—which is already crippled by a heavy debt burden—may see an unprecedented spike in borrowings, since the amount borrowed has already surpassed the sum borrowed in FY23.
The State Bank of Pakistan’s statistics shows that between July 1, 2023, and January 19, 2023–24, the government borrowed Rs3.99 trillion, rising 185% from Rs1.398 trillion during the same period the previous year.
For the past six months, the government has been bringing in more money than anticipated, which may come as a shock to many given that it is heavily depending on borrowing to pay for its costs.
The Ministry of Finance sources claim that because average inflation exceeded 28% in the first seven months of the fiscal year, the government was able to raise income.
However, when inflation increased, expenditure increased as well, forcing the ministry to take out more bank loans.
Given that debt payment accounts for half of the government’s budgetary expenditures, the administration is extremely worried about the expensive borrowing.
