$26bn external dues, most to be rolled over: SBP governor

KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad on Monday revealed that Pakistan's external payment obligations stood at $26 billion, of which $16 billion were expected to be rolled over or refinanced, while $8 billion out of the remaining $10 billion had already been repaid.

Speaking at the opening ceremony of Pakistan Literacy Week, Ahmad spoke on the country’s economic outlook, monetary policy, and financial literacy.

Noting that the country's foreign exchange reserves were likely to exceed $14 billion by June 2025, the governor said that the current account was expected to post a substantial surplus for the year, marking a turnaround from a deficit of$1.7 billion recorded last year.

Ahmad further highlighted that remittances for March 2025 were expected to reach $4.1 billion.

Reflecting on economic challenges in recent years, the SBP governor noted that in 2022, Pakistan faced rapid inflation, a sharp decline in foreign exchange reserves — equivalent to just two weeks of imports — and a 50% depreciation in the exchange rate.

The gap between interbank and open market rates had also widened significantly during that time. In response, the SBP took strict policy measures, including restrictions on imports and a significant increase in interest rates.

These efforts, he said, helped bring inflation down to a low of 0.7% in March 2025. However, he warned that inflation was expected to rise again from next month.

The governor highlighted that Pakistan's current account, previously in deficit, is now in surplus. He said that despite all odds, the current account remains in surplus and the exchange rate has stabilised as a result of targeted policy actions.

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

Discussing the growth outlook, Ahmad said GDP growth for FY25 is expected to remain between 2.5% and 3.5%, though if the agriculture sector performs well, it could reach as high as 4.2%.

He reaffirmed the SBP's strategic focus on promoting financial literacy, adding that various activities will take place across the country during Literacy Week. He also expressed strong confidence in his team, saying, "I trust my team up to 98%."

Furthermore, expanding on the financial and economic objectives, the central bank's chief said that they aim to increase financial inclusion to 75% by 2028 — a figure which currently stands at 64%.