5MFY26 budgetary support: Govt borrowing from SBP stays in negative zone

KARACHI: The federal government’s borrowing from the State Bank of Pakistan (SBP) remained in negative territory during the first five months of the current fiscal year (FY26), reflecting a continued shift away from State Bank financing for budgetary needs.

According to the statistics released by the SBP on Monday, the government retired Rs 877.228 billion from July 1 to November 28, 2025 to the SBP, compared with net borrowing of Rs 32 billion in the same period last year.

Pakistan’s GDP to grow 3.25-4.25% in FY26, says SBP governor

Analysts said the federal government relied entirely on the scheduled banks to meet its financing needs during the period, which resulted in negative borrowing from the State Bank.“The present government effectively managed its cash flows to meet liquidity requirements while adhering to its commitment of zero borrowing from the state bank, as mandated under the SBP Act,” they added.

According to Khurram Schehzad, Advisor to the Finance Minister, the negative borrowing from the SBP is a result of disciplined fiscal management and strategic use of surplus funds for early retirement of costly debt and over the period, lower debt servicing will make fiscal space for development, social protection, and growth-enhancing priorities. “This will also help to improve policy credibility and investor confidence in the near future”, he added.

Copyright Business Recorder, 2025