Business

Rs24tr liquidity fails to spur economic growth

Published

23 hours ago

February 7, 2026

KARACHI: Although the government raised over Rs24 trillion through borrowing and enhanced revenues during the past two and a half years, heavy bank borrowing reduced the availability of credit for the private sector, constraining economic growth.

Official data released by the State Bank showed the government borrowed Rs8.519tr from banks in FY24, Rs5.434tr in FY25 and Rs2.1tr in the first seven months of the current fiscal year (FY26).

Total borrowing from banks during this period reached Rs16tr, almost 50 per cent of the total stock of government borrowing (Rs32.3tr) at the end of June 2025.

The country’s revenues nearly doubled in two years, marking a major turnaround, as the government’s total revenues jumped from Rs9.6tr to almost Rs18tr. This increase was driven by higher tax collection, new taxes and support from the central bank.

Revenues nearly doubled from Rs9.6tr to almost Rs18tr in two years

During this period, the government raised additional liquidity of Rs24.5tr through bank borrowing and higher revenue generation, but this was not reflected in the economy in terms of growth.

Despite this huge liquidity, the government could not accelerate economic activity, either due to policy failure or misdirected spending. The negative impact of banks’ lending to the government appeared in reduced lending to the private sector, which stood at a cumulative Rs2.2tr during the same period.

The staggering figure of Rs24tr appears sufficient to bring vital change to the economy, but spending remained unproductive, and for the last three years the country has struggled to achieve a better growth rate. The GDP growth target for this year is 3.7 to 4.7pc, and the State

Bank believes 3.7pc could be achieved in FY26.

However, despite low inflation of 5.6pc, the State Bank is not ready to cut the interest rate to allow a higher flow of liquidity to the private sector. The only recent incentive announced for the export sector was a reduction in the refinancing rate. The export sector has not shown any significant improvement.

Trade and industry have been demanding an interest rate in line with inflation, but policymakers appear satisfied with low but stable growth. Low economic growth has increased poverty each year, with 46pc of the population living below the poverty line.

The government has not presented any plan to address this serious issue of rising poverty. Low growth continues to increase unemployment and poverty, which is being addressed largely through charity.

Published in Dawn, February 7th, 2026

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Business

SECP gets 5th commissioner

Published

20 minutes ago

February 8, 2026

hussainbinnoman3@gmail.com

ISLAMABAD: The government has appointed Imtiaz Haider as the fifth commissioner of the Securities and Exchange Commission of Pakistan (SECP), completing the regulator’s minimum strength.

Mr Haider previously served as SECP commissioner from 2011 to 2014 and was managing director and CEO of Islamabad Stock Exchange.

The appointment will enable the SECP to establish appellate benches.

Published in Dawn, February 8th, 2026

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Business

Services export surges to $4.76bn

Published

1 hour ago

February 8, 2026

hussainbinnoman3@gmail.com

ISLAMABAD: Pakistan’s services exports rose 16.51 per cent in the first half of (July to December) 2025-26 compared with the same period last year, largely on the back of higher proceeds from the information technology sector.

The performance stands in contrast to commodity exports, which have shown uneven movement, as the services sector has posted uninterrupted growth since the beginning of the current fiscal year.

The export of services reached $4.764 billion in 1HFY26, up from $4.089bn over the corresponding period last year, according to data compiled by the Pakistan Bureau of Statistics.

The monthly trends showed that services exports rose by 18.27pc year-on-year in July, followed by increases of 8.41pc in August, 14.85pc in September, 17.61pc in October, 22.26pc in November, and 15.94pc in December. The growth in the export of services is mainly led by telecommunications, computer, and information services.

IT sector drives 16.51pc rise in July-Dec FY26

In rupee terms, exports improved by 18.04pc to Rs1.342tr in 1HFY26, up from Rs1.137tr in FY25. This clearly indicates that export of services is steadily on the rise in the current fiscal year. In December, exports of services reached $935.16m, up from $806.61m in the corresponding month of last year, indicating a growth of 15.94pc. On a month-on-month basis, exports of services grew by 15.84pc.

In FY25, Pakistan’s export of services recorded a growth of 9.23 per cent to $8.39 billion from $7.68bn over the corresponding months of last year. Services exports have grown since February 2024, mainly due to a surge in information technology and other business exports. However, there was a 6.50pc decline in August 2024.

According to data compiled by the State Bank of Pakistan, exports of Telecommunications, Computer, and Information Services reached $2.236 billion in July-December FY26, up from $1.866bn in the corresponding months of last year, indicating a growth of 19.82pc.

The export of other business services recorded growth of 24.87pc to $1.014bn in 1HFY26, compared with $812m over the corresponding months of last year. The export of transport services increased by 0.44pc to $462m in FY26 as against $460m over the last year.

However, the export of travel services grew 19.49pc to $429m during 1HFY26, compared with $359m over the last year. At the same time, the import of services surged by 15.75pc to $6.504bn in 6MFY26 as against $5.619bn over the corresponding months of last year. On a month-on-month basis, the import of services increased by 34.39pc.

Published in Dawn, February 8th, 2026

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