The government has decided to take additional loans of Rs 1.5 trillion during the three months of March to May 2023 to pay the monthly salaries to the employees of the loss-making public sector institutions and to meet other expenses besides paying the interest on the loans already taken.
The government has set a total borrowing target of seven trillion rupees, a major part of these loans i.e, 5.5 trillion rupees will be repaid as interest on earlier loans taken from financial institutions.
According to Tahir Abbas, Head of Research at Arif Habib Limited, the internal debt burden on the government of Pakistan is increasing due to the delay in the restoration of the IMF loan program. The largest portion of government expenditure is now interest payments on loans.
