FY11 Monetary Expansion up by 14.42 percent

Karachi: Huge government borrowing has contributed around 90% to the monetary expansion, which grew by 14.24% in FY11.

According to Alfalah Securities Limited, SBP data shows that the government borrowed PkR 716bn in FY11, contributing heavily to the total monetary expansion of PkR 824bn. During July-May FY11, the growth of credit to private sector credit slipped to 3.4% as compared to 3.6% over the same period last year. During July-April FY11, the working capital loans increased significantly to PkR 144.7bn, as compared to PkR 47.4bn in the corresponding period last year, this staggering increase was a result of a rise in prices of raw materials, specifically cotton, sugarcane and edible oil.

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