ISLAMABAD: During the week ending January 12, 2024, the government of Pakistan accrued an additional debt of Rs86 billion, bringing the total net borrowing for the ongoing fiscal year 2024 to Rs2.57 trillion, as per the weekly estimates from the central bank.
The government sector borrowings are categorized into three main segments based on the purpose of the loan, namely budgetary support, commodity operations, and others.
Breaking down the figures, the weekly net borrowing for budgetary support amounted to Rs87.7 billion, while the retirement of commodity operations stood at Rs1.37 billion. Simultaneously, Rs48.4 million was retired for other purposes during the week.
Consequently, the cumulative borrowing for the current fiscal year 2024 is now Rs2.77 trillion for budgetary support, Rs193.72 billion for the retirement of commodity operations, and Rs1.1 billion for other purposes.
The primary sources of financing for budgetary support are the State Bank of Pakistan and the Scheduled Banks.
In this fiscal year, the government has repaid a net sum of Rs1.05 trillion to the central bank, with the Federal Government retiring Rs954.56 billion, the Provincial Government retiring Rs77.73 billion, AJK Government retiring Rs11.17 billion, and the GB Government retiring Rs2.05 billion.
Meanwhile, the Scheduled Banks have extended a net total of Rs3.81 trillion, out of which the Federal Government borrowed Rs3.9 trillion, while the Provincial Government retired Rs90.41 billion.
Meanwhile, the State Bank of Pakistan (SBP) has confirmed the receipt of the second tranche of Special Drawing Rights (SDR) amounting to SDR 528 million, equivalent to $705.6 million, from the International Monetary Fund (IMF). This injection of funds will be reflected in the SBP reserves, contributing to financial stability for the week ending on January 19, 2024.
The disbursement is part of the Stand-By Arrangement (SBA), with the total disbursed amount now reaching $1.9 billion. The remaining $1.1 billion is anticipated to be received following another review scheduled for February 2024.
As of January 5, 2024, the SBP’s total reserves were reported at $8.15 billion. It is noteworthy that Pakistan secured a $3 billion SBA from the IMF towards the end of the fiscal year 2023, which played a crucial role in averting a sovereign debt default in the cash-strapped nation.
The IMF’s disbursement plan involved an initial $1.2 billion, with the remaining amount disbursed in two installments subject to reviews. The successful completion of the first review of Pakistan’s economic reform program on January 11, 2024, marked a significant milestone. Following the approval by the IMF board, it was noted that economic activity in Pakistan had stabilized, although challenges persist, contingent on the implementation of sound policies.
