Does Government Borrowing Crowd out Private Sector Credit in Pakistan

Sajjad Zaheer (), Fatima Khaliq () and Muhammad Rafiq
Additional contact information
Muhammad Rafiq: State Bank of Pakistan

No 83, SBP Working Paper Series from State Bank of Pakistan, Research Department

Abstract: We investigate the impact of government borrowing from the scheduled banks on the credit to private sector in Pakistan, using monthly data from 1998:M6 to 2015:M12. We find that a one percentage point growth in the government borrowing leads to 8 basis points crowding out of the private sector credit in four months. Albeit small, there is negative impact of government borrowing on the private sector credit. The results remain unchanged even after implementation of the interest rate corridor since August 2009.

Keywords: Private sector credit; Government policy and regulation; Government borrowing; Emerging economies (search for similar items in EconPapers)
JEL-codes: E5 G18 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2017-02
New Economics Papers: this item is included in nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sbp.org.pk/publications/wpapers/2017/wp83.pdf First version, 2017 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sbp.org.pk/publications/wpapers/2017/wp83.pdf [301 Moved Permanently]--> https://www.sbp.org.pk/publications/wpapers/2017/wp83.pdf)

Related works:
Working Paper: Does Government Borrowing Crowd out Private Sector Credit in Pakistan (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sbp:wpaper:83

Access Statistics for this paper

More papers in SBP Working Paper Series from State Bank of Pakistan, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Faisal Saleem ().