At the close of first quarter, the federal government has emerged as the sole borrower from those banks which were scheduled. On the other hand, private and public sector firms are still retiring their debts. Moreover, State Bank of Pakistan reported that the private sector borrowings in the first quarter we significantly lower that the corresponding last year. Further more, Rs49.39 billions are retired from private sector in the first quarter of current fiscal year, which was against to the borrowing of net Rs113.09bn from the same quarter last year. It is a fact that now it is showing peace of economic activities and contrast which are being carried by the private sector.

Finally, the government could find itself in a difficult spot as the high cost of borrowing is likely to widen the fiscal deficit.