ISLAMABAD: The Pakistani government’s high dependence on domestic loans to finance its expenditures hinders the development of a balanced budget, Aliya Hashmi, former member of the monetary policy committee (MPC) of the State Bank.
The government’s failure to attain a balanced budget, where revenues match expenditures, is regrettable. The root cause of the problem lies in excessive domestic borrowings, and resultant interest payments each year, she said.
According to the State Bank of Pakistan, the total domestic debt in FY22-23 rose to Rs35,076 billion from Rs31,085 billion in FY21-22.Aliya said the government faces the burden of interest payments at the end of each fiscal year while making the budget. Revenues always fall short of planned expenditures in the wake of allocating a substantial amount of revenue to the payments owed to the domestic banks.
“Owing to a shrunk space for a balanced budget, the government faces challenges to finance development and social sector projects, specifically those related to education and health,” she said. –Agencies
