Credit to Public Sector Enterprises (PSEs) declined by 11 percent during the first seven months (July-Jan) of this fiscal year (FY19). PSE's obtained credit amounted to Rs 102.457 billion in July-Jan of FY19 compared to Rs 115.580 billion during the corresponding period last year, depicting a decline of Rs13.123 billion. According to State Bank, importantly, a major share of PSE borrowings was attributed towards addressing liquidity constraints in the energy sector rather than investing in development projects to stimulate the real activity.

The bulk of the PSE credit was taken by Pakistan State Oil (PSO) and the amount was utilized for payment settlements with its domestic and international debtors, which were pending for some time due to stuck-up receivables from different energy related enterprises.

Similarly, additional borrowings by Power Holding Private Limited (PHPL) also contributed to increase in PSEs credit. With current increase, the overall stocks of credit to PSEs surged to Rs 1.068 trillion as on Jan 25, 2019.

Copyright Business Recorder, 2019