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KARACHI: The government borrowed Rs77.68 billion from scheduled banks up to Aug 17 and retired its debt to the State Bank of Pakistan (SBP), indicating a shift in pattern.

The SBP reported on Friday that the government’s net retirement to the central bank up to Aug 17 stood at Rs110bn as against net borrowing of Rs185.9bn in the same period of last fiscal year.

Meanwhile, the credit for public sector enterprises (PSEs) jumped to Rs51.88bn during the first 47 days of the current fiscal year compared to net retirement of Rs4.3bn during the same period of last year. However, most of the borrowing was done after the formation of newly elected government.

The report reveals that the credit to PSEs shot up to Rs51.88bn versus net retirement of Rs30.8bn in the same period of FY18.

The debts of PSEs have been shooting up for the last three years, recording a 29.8 per cent growth in FY18 to Rs1068bn. However, this increase was much higher in FY17 at 44.8pc. The newly elected government has shown its willingness to privatise the loss-making public companies like Pakistan International Airlines, Pakistan Steel Mills etc.

The credit to private sector also witnessed a positive start as it rose by Rs14.8bn in the first 47 days of FY19, compared to a net retirement of Rs116.5bn in the same period of 2017-18. The credit to private sector has been on rise for the last couple of years, growing by Rs775.5bn in FY18 versus Rs748bn in FY17.

Published in Dawn, September 1st, 2018