The government’s net borrowing for budget support has surged by 16.31% over the past year. As of March 28, 2025, borrowing reached Rs31.133 trillion, up from Rs26.766 trillion in April 2024. This increase reveals the government’s growing financial pressures, attributed to low tax revenues and high debt servicing needs.
The government secured Rs4.355 trillion from the State Bank of Pakistan (SBP) and Rs26.777 trillion from various scheduled banks. Borrowing reached a high of Rs30.842 trillion in mid-September 2024. This peak coincided with a record profit transfer from the SBP of Rs3.42 trillion, a substantial increase from Rs1.142 trillion last year.
Despite a slight decline after the peak, borrowings continued to rise into early 2025. This trend indicates the government’s heavy reliance on the banking system for budgetary support. The government frequently borrows from banks to meet its debt obligations, including interest and principal repayments.
This borrowing increase occurs as the government negotiates with the International Monetary Fund (IMF). Recently, Pakistan reached a staff-level agreement with the IMF for a $7 billion loan program. Furthermore, the IMF agreed to provide $2.3 billion under the Resilience and Sustainability Facility, pending approval from its executive board.