Government to raise Rs 211.5 billion from banks in Pakistan

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banks in pakistan

Rs 211.5 billion is supposed to be raised through commercial banks over the next year by the government out of the total Rs 807 billion through loans and grants for the Public Sector Development Programme (PSDP) which has planned to borrow Rs 20.25 billion through a commercial banks consortium that gave away Rs 102.6 billion.

The budget makes for Rs 105.5 billion to be raised through bonds as external sources in the international market. A 10 year bond of $500 million was issued by the country at a rate of 8.25 pc coupon rate which not only became controversial but very high in accordance with others of the market.

About Rs 79 billion are supposed to be raised through Sukuks while 4 1 billion was raised in Nov 2014 from the international debtsby the five year dollar issued sukuks. Apart from this Rs 59.6 billion would be borrowed from China with targeted Rs 85.9 billion that reached Rs 142.4 billion at the year’s end.

About Rs 92 billion was to be seen from the Asian Development Bank but the amount that came was Rs 124.8 billion as Rs104.5 billion were decided to be taken from it.

The second largest amount (Rs 150 billion) was raised by IDA (International Development Association) while the amount of Rs 166.5 billion was raised last year while the actual borrowing came to Rs 172.6 billion at the end.

An amount of Rs 49.6 billion will be provided by the Islamic development Bank (IDB) which is less than last year as it wanted to have Rs 127.4 billion and received Rs 104.8 billion.

The government therefore wants Rs 807 billion to be raised as loans and grants through estimates of Rs 823 billion against its willingness to raise Rs 751.5 billion. Rs 12.6 billion out of this is to be expected as grants while the rest will be covered through loans as the entire amount needed by PSDP would be done through external borrowing or else a cut would be faced.

Rs 800 billion were slashed by the PSDP during the first three years of this government as big reductions are being seen by the government which is taking away the growth rate that is already 4.7 pc at the year though targeted to be 5.7 pc for the year.

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