Govt bank borrowing rises to Rs5.9tr in FY26
SBP data shows the government borrowed Rs5.9 trillion from banks in FY26, up from Rs5.4tr a year earlier. The reported increase comes as debt servicing for FY27 is projected at Rs8tr.
KARACHI: The federal government borrowed Rs5.9 trillion from banks during FY26, up from Rs5.4tr in the previous fiscal year, according to State Bank of Pakistan data reported on Monday.
The increase means government borrowing averaged roughly Rs500 billion a month in the outgoing fiscal year, or about Rs16.4bn a day. This reflected continued heavy reliance on bank financing to meet state expenditure, while noting that the corporate sector also invests in government securities and accounts for about 25pc of total investment in such papers.
The latest borrowing has added to domestic debt, with debt servicing projected to take up half of the total budget outlay in FY27. The government is set to spend Rs8tr on debt servicing in FY27 and is expected to continue borrowing in large amounts for that purpose.
Annual government borrowing has continued to rise year after year alongside sizeable spending needs. Banks have benefited from investing in government paper, describing it as risk-free, while the FY27 Public Sector Development Programme allocation stands at Rs1tr.
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