The State Bank of Pakistan (SBP) Governor, Jameel Ahmad, has announced that Pakistan will receive a significant $16 billion debt rollover from friendly nations during the current fiscal year. This will help manage the country’s total outstanding debt of $26.2 billion for FY25. However, the government still faces the challenge of repaying $10 billion by June 30th next year.
While the debt rollover provides some relief, SBP Governor warned that budgetary measures are likely to push inflation up to 13.5 percent. Rising wheat prices and geopolitical tensions in the Middle East could further exacerbate inflationary pressures. Despite these challenges, the Governor expressed optimism about achieving a more stable economic environment in the coming fiscal year.
To address the economic challenges, the government has secured a one-year extension in loan rollovers from Saudi Arabia and the UAE. Additionally, SBP Governor highlighted the government’s efforts to increase domestic exports and reduce the gap between open market and interbank dollar exchange rates.
The Governor emphasized the importance of maintaining sufficient foreign exchange reserves and achieving financial stability and transparency. He also expressed confidence in the eventual decline of the policy rate as the economy stabilizes.