KARACHI: The fiscal deficit narrowed to 0.7 per cent of GDP during July-March FY26, compared with 2.6pc last year, according to the Economic Survey.
The government sector borrowing for budgetary support increased by Rs850.6 billion as compared to Rs1,320.9bn during the same period last year.
The government has retired Rs1939.3bn to the State Bank, compared with the retirement of Rs287.4bn during the corresponding period last year.
At the same time, the government borrowed Rs2,789.9bn from scheduled banks, compared to Rs1,608.3bn during last year.
Wheat financing dips, rice surges to Rs29.5bn
“As a result, net government borrowing stood at Rs805.9bn during July-March FY26 as compared to Rs1,018.9bn during the same period last year,” said the survey.
With a view to promoting affordable housing finance, the government introduced a markup subsidy and risk sharing scheme — ‘Mera Ghar, Mera Ashiana’ — in 2025 to provide housing finance of up to Rs3.5 million.
The scope of the scheme was further expanded in April under the “Wazir-i-Azam Apna Ghar Programme-Ghar Ho Tu Apna” with an increase in the loan limit up to Rs10m.
“As a result, house building loans increased to Rs20.5bn during July-March FY26, compared to retiring of Rs4.1bn during the same period last year,” the survey added.
Similarly, auto loans rose by Rs68.7bn — up by 24.9pc from 11.7pc last year. Auto loans traditionally hold the largest share of consumer credit in Pakistan.
Credit cards also recorded a higher growth of 24.6pc to Rs38.9bn during the period under review, compared with 15pc last year.
Overall, the positive momentum in consumer lending indicates that lower interest rates and eased financing conditions have helped revive consumer demand and borrowing appetite, signalling a gradual improvement in household financial confidence and economic activity.
During July-March FY26, commodity financing recorded a net retirement of Rs43.2bn, compared with Rs303.4bn during the same period last year. Wheat financing recorded a net retirement of Rs45.4bn, compared with Rs326.9bn during the same period last year.
“The continued contraction in wheat financing over the last two years reflects a significant policy shift, as the federal government has stepped back from regulating wheat prices, and the Pakistan Agricultural Storage and Services Corporation did not participate in wheat procurement during this period,” according to the survey.
Similarly, fertiliser financing recorded a net retirement of Rs32.1bn.
In contrast, the sugar sector recorded net borrowing of Rs34.3bn, up from Rs23.2bn during the same period last year.
However, a big jump was noted in credit to the rice growing which increased to Rs29.5bn during 9mFY26 from Rs2bn. Cotton also received Rs18.3bn during the nine-month period, compared to just Rs1.5bn last year.
Published in Dawn, June 12th, 2026