According to the SBP, the Government of Pakistan has borrowed about 136 billion rupees in the first 45 days of the new fiscal year. Last year in August 2009 the Government borrowings were about 10.6 billion. It seems that our government has borrowed almost the ten times of the amount. On the other hand Small Provincial Governments of Sind, Balochistan and Khyber Pakhtunkhwa have returned 2.15 billion, 778 million and 10 billion rupees respectively to the central bank. Government of Punjab seems to be the only government whose borrowings have reached to 11.3 billion from State Bank. Non-Governmental sector borrowing has also reduced to about 65 billion during this period as compared to the 80 billion rupees of last year 2009 for the same period.

The chief cause of these increased borrowings by the federal government is the recent flood disaster. The Government is using these borrowings along with the aid provided by different foreign countries and other institutions for reconstruction and rehabilitation efforts. But on the other hand the experts have also warned that these increased government borrowings may also increase inflation in the country.

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