CHI - The Federal Government's budgetary borrowings have increased to an unbelievable level of Rs 652 billion in the outgoing financial year.
In terms of foreign exchange, the budgetary borrowings of the federal government amount to 10 billion dollars during July-mid June 2007-08, if calculated at average dollar-rupee exchange rate of 64 rupees in 2007-08, The Nation learnt on Thursday.
In FY07, the budgetary borrowings of the federal government were negative by 59 rupees, but in FY08 these massive borrowings amounted to 652 billion rupees.
Sources said that in 2007-08 the federal government could not raise required amount of foreign exchange from the international markets in the shape of the global bonds and the GDRs as a result the government had to resort to massive budgetary borrowings.
In previous two financial years, the federal government had raised around 5-6 billion dollars from the international markets through the sale of bonds and the GDRs that helped the government to contain the borrowings within the budgetary target or the acceptable level.
It may be noted here that Governor State Bank of Pakistan Dr Shamshad Akhtar had strongly opposed government's budgetary borrowings from the SBP and claimed that the unprecedented borrowings have fuelled inflation. In 11 months of the outgoing fiscal the general inflation had increased to 11.1 per cent while food inflation had been reported at 16.3 per cent. At the start of FY08 the general inflation was at 6.4 per cent while food inflation was at 8.5 per cent, while kept on growing with the passage of every week and month.
In the month of May 2008, the general inflation had gone up to 19.3 per cent, year-on-year basis while the food inflation had increased to 28.5 per cent.