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Country's debt is $26 billion for FY25
According to reports, SBP Governor Jamil Ahmed warned about inflation while briefing the National Assembly's Standing Committee on Finance and Revenue, chaired by MNA Naveed Qamar, about the performance of the country's foreign and domestic sectors for the current fiscal year. He said inflation is expected to rise but management can remain smooth in the current fiscal year due to the extension of credit given by friendly countries.
Presenting figures, he said Pakistan's debt outstanding for FY25 was $26.2 billion. However, China, Saudi Arabia and the United Arab Emirates have agreed to extend the loan of $12.3 billion by one year. Jameel Ahmed said this rollover is like a sigh of relief for the government in FY25.
Heavy debt burden on Pakistan
The decision by China, Saudi Arabia and the United Arab Emirates to extend Pakistan's loan by a year comes as Pakistan hopes that the International Monetary Fund (IMF) may approve a $7 billion bailout package later this month. SBP Governor Jamil Ahmed said the central bank has already repaid $1.5 billion of the loan last month, while the remaining $8.5 billion is to be repaid by the end of the current fiscal year. He said the country's foreign debt has reached $130 billion.
'GDP growth limited for a decade…'
SBP Governor Jamil Ahmed said that continuous measures have been implemented to control inflation in Pakistan and it is expected that it can be brought down to between 5 and 7 percent. Also, referring to Pakistan's GDP growth, he admitted that in the last decade, GDP growth has been limited to 3.5 percent, which is negligible compared to the country's population growth.
Jameel Ahmed stressed the need to increase the rate of domestic exports from 10 percent to 15 percent. Earlier, the Policy Research and Advisory Council (PRAC) had requested the State Bank of Pakistan to reduce the policy rate from 19.5 percent to 17.5 percent.