Pakistan's government borrowed Rs5.9 trillion from banks in the last fiscal year, a pace that averages Rs500 billion each month and Rs16.4 billion every single day. The fresh figures from the State Bank of Pakistan, released on Monday, expose a widening gap between revenue and spending that forces the state to lean heavily on the financial sector. Main Developments Total borrowing in FY26 hit Rs5.9 trillion, up from Rs5.4 trillion in FY25—an increase of roughly Rs500 billion year-on-year. The government's reliance on banks is not its only borrowing channel; the corporate sector also holds about 25 percent of all government paper. This aggressive accumulation of domestic debt carries a heavy price. Debt servicing in FY27 is projected to consume Rs8 trillion, which represents half of the entire federal budget for that year. The contrast is stark: while Rs8 trillion will go toward servicing past loans, only Rs1 trillion is allocated for the Public Sector Development Programme (PSDP), which serves 250 million people. Read also: Why Pakistan's daily fuel pricing plan threatens exports Background Each fiscal year, the government borrows more than it did the previous one, a pattern that reflects continuously expanding expenditures. Despite raising substantial revenue through taxes and diversifying its sources of borrowing, the state has not managed to curb its reliance on bank loans. The finance minister, a former banker, has not taken steps to reduce this massive borrowing, according to the data. Banks, meanwhile, continue to earn large profits by investing in risk-free government securities, creating a cycle where public debt feeds private sector gains with little apparent pressure for reform. Why It Matters Debt servicing consuming half the budget leaves scant room for development spending. With only Rs1 trillion for PSDP against Rs8 trillion for interest payments, infrastructure, education, and health projects face severe underfunding. The borrowing trend also signals that the government's fiscal discipline remains weak. If the pace continues, domestic debt will swell further, squeezing out productive investment and deepening the country's economic vulnerability. What's Next The government will need to borrow again in FY27 simply to service existing debt, even as it allocates Rs8 trillion for that purpose. Whether the administration can shift toward revenue generation or spending cuts to break the cycle remains an open question.