KARACHI: The government borrowing from banks sharply fell 34 percent to Rs748.61 billion in the first 10 months of the current fiscal year as tax revenue collection increased to meet budgetary requirements, analysts said on Monday.
The government borrowed Rs1,141.89 billion through the sale of securities to banks in the July-April period of 2014/15, the central bank data showed.
Analysts said the measures taken by the government to boost the revenue yielded positive results as the tax collection by the Federal Board of Revenue registered 19 percent growth to Rs2,345 billion during the period under review.
The fiscal deficit stood at 1.7 percent of GDP in the first half of the current fiscal year as against 2.4 percent in the last fiscal year.
The government estimated budget deficit at 4.3 percent for 2015/16 compared with 5.3 percent in the last fiscal year.
The State Bank of Pakistan (SBP) attributed the lower borrowing to substantial external inflows, including loans from international financial institutions, Eurobond issuance and coalition support fund.
The government planned to raise Rs1,100 billion during the next three months (May-June) through the sale of maturities.
The government was borrowing lower than the targeted amount during the last few auctions conducted during this fiscal year.
In July-April, the government borrowing from the SBP was meager Rs12.18 billion as against deposits of Rs386 billion during the corresponding period of the last year.
The lower government borrowing from the banks created space for the private sector credit off-take. The banking system extended Rs340.8 billion loans to private sector during the period under review as compared with Rs212 billion a year ago, up 60 percent.
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