Pakistan Will Get $16 Billion Debt Rolled Over This Fiscal Year: SBP Governor

Governor State Bank of Pakistan (SBP) Jameel Ahmad on Wednesday said Pakistan’s total outstanding debt for FY25 stands at $26.2 billion. Friendly nations will roll over more than $16 billion, leaving $10 billion to be repaid by June 30 next year. Last month, the central bank paid $1.5 billion, with $8.5 billion remaining for the fiscal year. In FY24, SBP paid $12.5 billion, while the country’s external debt reached $130 billion. He said this at a session of the National Assembly Standing Committee on Finance and Revenue, chaired by MNA Naveed Qamar. Jameel also warned that budgetary measures are likely to increase inflation but was optimistic that the external sector will remain manageable this fiscal year due to debt rollovers from friendly countries. Briefing the committee alongside the SBP governor, Secretary Finance Imdad Ullah Bosal announced that Pakistan will receive its first IMF tranche following a $4.4 billion rollover of Chinese commercial loans. The government also secured a one-year extension in loan rollovers from Saudi Arabia and the UAE. SBP Governor said $12.3 billion in deposits from these countries would be rolled over in the current fiscal year. He said taming domestic inflation remains a significant challenge and projected it to rise to 13.5 percent due to budgetary measures and energy prices. He cautioned that rising wheat prices and potential Middle East conflicts could exacerbate inflation. He said inflation rates would stabilize between 5-7 percent starting next fiscal year. He further said foreign exchange reserves could increase to $13 billion by the current fiscal year’s end. The governor also outlined a five-year plan to stabilize the economy by controlling the current account deficit, maintaining sufficient forex reserves, and achieving financial stability and transparency. The governor emphasized increasing domestic exports by 10-15 percent. He also mentioned efforts to reduce the gap between open market and interbank dollar exchange rates and prevent Hundi and dollar smuggling. The governor was optimistic that the policy rate would fall as the economy stabilizes despite the high interest rates necessary for controlling inflation.