Pakistan’s External Payment Obligations and Economic Outlook

  • Already paid: $8 billion; To be refinanced: $16 billion.
  • Projected GDP growth: 2.5–3.5%.
  • Anticipated rise in inflation next month.

KARACHI: The Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, stated on Monday that Pakistan’s external payment obligations amount to $26 billion. Of this, $16 billion is expected to be rolled over or refinanced, and $8 billion of the remaining $10 billion has already been settled.

Ahmad addressed the country’s economic perspective, monetary policy, and financial literacy during the inaugural ceremony of Pakistan Literacy Week.

The SBP governor reflected on the economic hurdles of recent years, highlighting that Pakistan experienced rapid inflation, a significant decrease in foreign exchange reserves to only two weeks’ worth of imports, and a 50% devaluation of the exchange rate in 2022.

Additionally, the disparity between interbank and open market rates had grown substantially during that period. In response, the SBP implemented stringent policy measures, which included import restrictions and a considerable increase in interest rates.

According to Ahmad, these initiatives contributed to reducing inflation to a low of 0.7% in March 2025. However, he cautioned that inflation is projected to increase again starting next month.

The governor emphasized that Pakistan’s current account, which was previously in deficit, is now in surplus. He noted that the current account remains in surplus despite challenges, and the exchange rate has stabilized as a consequence of focused policy interventions.

The gap between the interbank and open market exchange rates has also diminished.

Concerning the growth forecast, Ahmad indicated that GDP growth for FY25 is anticipated to be between 2.5% and 3.5%. However, it could potentially reach 4.2% if the agriculture sector performs favorably.

He restated the SBP’s strategic emphasis on enhancing financial literacy, mentioning that various activities would occur nationwide during Literacy Week. Furthermore, he conveyed strong confidence in his team, stating, “I trust my team up to 98%.”

The central bank’s chief elaborated on the financial and economic objectives, mentioning their goal to increase financial inclusion to 75% by 2028, a figure that currently stands at 64%.

The governor noted that the country’s foreign exchange reserves are expected to surpass $14 billion by June 2025, and the current account is projected to show a significant surplus for the year, a notable improvement from the $1.7 billion deficit recorded the previous year.

Ahmad further pointed out that remittances for March 2025 are expected to total $4.1 billion.