KARACHI: The government plans to borrow Rs5.6 trillion from banks between August and October, highlighting severe liquidity issues despite setting an ambitious revenue target for the current fiscal year.
The State Bank of Pakistan (SBP) has outlined the government’s strategy to raise Rs5.59 trillion through Treasury Bills (T-bills) and Pakistan Investment Bonds (PIBs) over the next three months. Of this, Rs3.435 trillion will come from T-bills and Rs2.16 trillion from PIBs.
Government debt has surged dramatically over the past five years, consuming a large portion of the revenue generated. For the fiscal year 2024-25, the government has allocated Rs9.775 trillion for interest and loan repayments, representing 51.78% of the total budget outlay of Rs18.877 trillion.
In FY24, the government borrowed a record Rs8.5 trillion from banks, effectively crowding out the private sector and stifling economic growth. The upcoming borrowing plan includes Rs1.12 trillion for 5-year PIBs and Rs1.04 trillion for 10-year PIBs. Notably, on October 16, the government plans to auction Rs800 billion in T-bills, followed by another Rs750 billion on October 30, totaling Rs1.55 trillion in just 15 days.
The current budget allocates Rs1.038 trillion for servicing foreign debt and Rs8.736 trillion for domestic debt.
