Pakistan will have to repay $26.2bn foreign loans this year: SBP chief

ISLAMABAD: The State Bank of Pakistan (SBP) Governor, Jameel Ahmed, informed a National Assembly panel on Wednesday Pakistan would have to repay foreign loans of $26.2 billion, out of which there would be a rollover of $12.3 billion deposits, during the current fiscal year.

He said the central bank had lifted all kinds of restrictions on imports. “We are hopeful that there would be re-financing of $4 billion commercial loans. In net terms, the total repayment of foreign loans will be standing at $10 billion in the current fiscal year, out of which so far repayment of $1.4 billion had been made and remaining external repayment would be standing at $8.6 billion for FY2025,” the SBP chief testified before the NA Standing Committee on Finance and Revenue. The meeting was held under Syed Naveed Qamar here on Wednesday.

The SBP chief informed the committee that there was a substantial reduction in the import of POL [petrol, oil, lubricant] products, which decreased from $2.5 billion to $1.4 billion on per month basis.

During the proceedings, there was an exchange of hot words between opposition leader Omar Ayub from the PTI and treasury party PMLN MNA Azhar Kiani. The opposition leader stated that there was pressure on MNA Mobeen Arif for changing loyalty. Omar Ayub boycotted the NA panel proceedings along with other opposition party members.

The SBP governor said China’s commercial loan of $4 billion would be re-financed; first it would be repaid but then it would be made available again. Similarly, he said that Pakistan was expecting disbursements of foreign loans of $4.4 billion from the Asian Development Bank and World Bank during the current fiscal year. “There is no pressure on external payments; therefore, the value of rupee is likely to remain stable,” he added.

He said that inflation will be limited to 13.5 per cent this fiscal year and 7pc in the next fiscal year, while foreign exchange reserves might touch $13 billion by the end of this fiscal year. He said that from the year 2024 to the financial year 2028, foreign exchange reserves would be equal to 3 months of imports. From the year 2024, to the financial year 2028, financial stability and transparency would be brought about.

He said the GDP growth had been limited to 3.5pc for the last 10 years and it was necessary to increase domestic exports from 10pc to 15pc. He said no more funds could be allocated for the BISP this year.

Minister of State for Finance Ali Pervaiz Malik said the Ministry of Planning could give a better survey on poverty. The finance secretary said, “We have full support of the IMF on BISP. There are 1.5 million people living below 32 points.” He said that at present 9.3 million beneficiaries were being paid while another six million wanted to be included.