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A person can be seen arranging stacks of PKR notes. — AFP/File
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KARACHI: According to the government’s economic survey released on Monday, the government borrowed Rs 1.608 trillion from banks in the nine months of this fiscal year ending June 2025, which was less than Rs 4.874 trillion a year ago, which, according to the economic survey released on Monday, reflects financial discipline.
Pakistan’s economic survey for 2024-25 was published before the federal budget for the next financial year, which began in July, and should be unveiled on Tuesday with close harmony with the International Monetary Fund (IMF). Prime Minister Shahbaz Sharif’s government aims to increase the GDP by 4.2 percent in the financial year 26, which focuses on maintaining the basic surplus, expanding tax base, implementing energy sector reforms, mobilizing investment and gaining privatization.
Analysts believe that the next budget will have limited taxation. Instead, the government is expected to increase non -revenue of tax on petroleum products and tighten development costs. However, due to the current geographical political situation, defense spending can be deducted from deductions.
The survey indicates that from July to March, borrowing to support the budget in the public sector has reduced Rs 1.32 trillion in the same period last year against Rs 4.32 trillion. The government paid a loan of Rs 287.4 billion to the State Bank of Pakistan (SBP), which was Rs 654.7 billion last year.
The survey states that “borrowing a low government reflects financial stability as the fiscal deficit was 2.4 percent of GDP during the July 2015 fiscal year 2015, compared to 3.7 percent in the same period last year,” the survey said.
“The fiscal deficit was fully financed by domestic borrower sources, unlike the same period last year, where about 88 percent of the financing was obtained locally and the remaining 12 percent of external sources,” he said.
In the first nine months of this financial year, total markup expenditure reached Rs 6.439 trillion, representing 66 % of the entire year’s budget estimates, with Rs 9.75 trillion. Most of the costs were on domestic loans, which were Rs 8.783 trillion or 66 % annual allocated 8.736 trillion rupees. Meanwhile, interest payments on external loans were Rs 656 billion, which is equivalent to 63 % of the budget.
In a short note, top line securities said that in the last six years, Pakistan’s interest payment has increased from Rs 2 trillion to Rs 8.6 trillion in the last six years, which has created a special burden due to loans and high interest rates.
Interest costs have doubled as GDP section, which has now reached about 8.0 %, which restricts financial support for growth, health and education. However, interest rates have dropped by 11 % from their height, preliminary signs of relief indicators have been shown in FY 25. It added that the government could provide some breathing rooms to support economic recovery in fiscal year 26.
According to the survey, public debt at the end of March was Rs 76 trillion, with domestic debt was Rs 51.51 trillion and external debt was Rs 24.5 trillion. The government retired Rs 2.4 trillion in Treasury Bills and reduced the short -term loan and introduced new financial equipment, including two -year zero coupon Pakistan Investment Bond and a month’s T -Bill.
Strategic dues efforts include the purchase of about 1 trillion rupees in government securities through bax and exchange. Pakistan also released the first green Sukk of Rs 30 billion, which made progress in green finance and sustainable investment.
The survey said that from July to March, credit to the private sector increased significantly to Rs 767.6 billion, which increased significantly by Rs 265.2 billion during the same period last year. In private sector credit, loans to businesses increased by Rs 830.9 billion, compared to the same period last year, Rs 307.8 billion.
