Private sector has further been sidelined as their borrowing from banking system fell to Rs8 billion in four months of the current fiscal year, reflecting a worsening investment environment.
The borrowing trend was better during the same period last year when it touched Rs86bn.
The State Bank reported on Tuesday that till November 7, the private sector borrowing was Rs8.053bn. The borrowing fell from Rs22bn till October 31 indicating the hesitation of the private sector to invest in the country.
Bankers and analysts said that the private sector was crowded out as banks preferred investment in the government securities which is high yielding and risk free.
Since the dip in inflation to 5.8 per cent in October, the real interest has gone up to about 3pc and if it is compared with the return on Pakistan Investment Bonds, the real interest jumps further high.
