09-12-2009, 05:48 AM
RIZWAN BHATTI
KARACHI (September 12 2009): The federal government has borrowed Rs 112 billion from banking system for budgetary support during the first two months of the current fiscal year mainly due to rising expenditure and shortfall in revenue, source said. They said that the government is still relying on banking sector borrowing for budgetary support due to below target revenue collection, besides slow privatisation process.
The State Bank of Pakistan(SBP) on Friday said that net government sector borrowing for budgetary support stood at Rs 111.863 billion during July-August 2009 from both the schedule banks and the central bank. After the current upsurge in stocks government sector borrowing from banking system mounted to Rs 1.792 trillion on August 29, 2009, against Rs 1.681 trillion at the end of June 2009, depicting an increase of 7 percent in two months.
However, the borrowing during the first two months of current fiscal is 14 percent lower than Rs 130.497 billion in the same period of last fiscal year. Major upsurge has been witnessed in the borrowing from scheduled banks, which reached Rs 62.151 billion during the period as previously it stood at the negative position of Rs 20.41 billion same period of last fiscal year 2009.
The government sector budgetary borrowing from central bank shows a decline of 67 percent during the July to August of current fiscal year, as central already has asked the government to minimise their borrowing from central bank.
Government has borrowed some Rs 49.712 billion form central bank during the first two months of current fiscal year as compared to Rs 150.908 billion during the same period of last fiscal year, registering a decreased of Rs 101.196 billion.
"Below target revenue collection, slow privatisation process and high expenditure have compelled the government to borrow more for budgetary support from local banking system," economists said. They said that borrowing from scheduled banks as compared to central bank borrowing depicts that the central bank is passing the borrowing to the scheduled banks by selling more treasury bills.
"Issuance of Pakistan Investment Bonds (PIBs) during the last 15 days also reflects that government is relying more on the local banking system's borrowing," they added.
Similarly, as per latest statistics Broad Money (M2) has registered a negative growth of 1.61 percent during the July-August of the current fiscal year 2010 as compared to a negative growth of 2.07 percent in corresponding period of the last fiscal.
http://www.brecorder.com/index.php?id=960318
KARACHI (September 12 2009): The federal government has borrowed Rs 112 billion from banking system for budgetary support during the first two months of the current fiscal year mainly due to rising expenditure and shortfall in revenue, source said. They said that the government is still relying on banking sector borrowing for budgetary support due to below target revenue collection, besides slow privatisation process.
The State Bank of Pakistan(SBP) on Friday said that net government sector borrowing for budgetary support stood at Rs 111.863 billion during July-August 2009 from both the schedule banks and the central bank. After the current upsurge in stocks government sector borrowing from banking system mounted to Rs 1.792 trillion on August 29, 2009, against Rs 1.681 trillion at the end of June 2009, depicting an increase of 7 percent in two months.
However, the borrowing during the first two months of current fiscal is 14 percent lower than Rs 130.497 billion in the same period of last fiscal year. Major upsurge has been witnessed in the borrowing from scheduled banks, which reached Rs 62.151 billion during the period as previously it stood at the negative position of Rs 20.41 billion same period of last fiscal year 2009.
The government sector budgetary borrowing from central bank shows a decline of 67 percent during the July to August of current fiscal year, as central already has asked the government to minimise their borrowing from central bank.
Government has borrowed some Rs 49.712 billion form central bank during the first two months of current fiscal year as compared to Rs 150.908 billion during the same period of last fiscal year, registering a decreased of Rs 101.196 billion.
"Below target revenue collection, slow privatisation process and high expenditure have compelled the government to borrow more for budgetary support from local banking system," economists said. They said that borrowing from scheduled banks as compared to central bank borrowing depicts that the central bank is passing the borrowing to the scheduled banks by selling more treasury bills.
"Issuance of Pakistan Investment Bonds (PIBs) during the last 15 days also reflects that government is relying more on the local banking system's borrowing," they added.
Similarly, as per latest statistics Broad Money (M2) has registered a negative growth of 1.61 percent during the July-August of the current fiscal year 2010 as compared to a negative growth of 2.07 percent in corresponding period of the last fiscal.
http://www.brecorder.com/index.php?id=960318