KARACHI: At the close of first quarter, the federal government has emerged as the sole borrower from scheduled banks whereas private and public sector firms are still retiring their debts.

The State Bank of Pakistan (SBP) on Friday reported that the private sector borrowings in the first quarter were significantly lower than the corresponding last year.

In fact, the private sector retired Rs49.39 billion in the first quarter of current fiscal year, which was against the net borrowing of Rs113.09bn in the same quarter last year.

It shows the contrast and pace of economic activities being carried out by the private sector. The government is not expecting high economic growth rate but the poor participation of private sector could damage even the lowest growth expectations for the ongoing fiscal year.

The government could find itself in a difficult spot, as the high cost of borrowing is likely to widen the fiscal deficit.

Published in Dawn, October 12th, 2019