Govt’s Borrowing in First Quarter of Current Fiscal Year Nears Rs. 380 Billion

The net borrowing of the federal government from the local banking sector to meet its financial requirements for running government affairs stood at Rs. 379.53 billion in the first quarter of the current fiscal year (FY23). Sources in the Finance Ministry told ProPakistani that the government has borrowed Rs.379.53 billion (cash basis) from local banking sector during the first quarter (July-Sept) of FY23. The government has taken Rs. 209 billion net loan from the State Bank of Pakistan (SBP) during the period under review. It is pertinent to mention here that the government can’t borrow directly from central bank under the mandatory condition of the International Monetary Fund (IMF). The ninth review of International Monetary Fund (IMF) is expected to start next week in Islamabad. Finance Minister of Ishaq Dar will lead the Pakistani side in the meeting. The officials believe that the government is not violating any condition of the IMF agreement. Net lending from central bank will be zero by end of the fiscal year, the sources said. Sources said that the government has also borrowed Rs.170.53 billion from scheduled banks during the first quarter of the current fiscal year to meet to bridge the budget deficit. The borrowing from scheduled banks in the current fiscal year is slightly higher compared to the same period of the last fiscal year. It is pertinent to mention here that the government can’t borrow directly from State Bank under the mandatory condition of the International Monetary Fund (IMF). The government has accepted the condition during the Extended Facility Fund loan program was signed on 2019. Under the condition, the government had not only got any new loans from the State Bank, but, it had retired Rs278 billion during the same period of the last fiscal year. The ninth Review Meeting with IMF and Pakistan is expected to be kicked off from the next week in Islamabad. According to the Finance Ministry, the dialogue between IMF-Pakistan talks will likely to start from Oct 25, under the EFF loan program. Finance Minister of Ishaq Dar will lead the Pakistani side in the meeting.