Pakistan's real external debt stands at around $100 billion: central bank governor

Pakistan central bank Governor Jameel Ahmad stated on Thursday that the country's real external debt stands at around $100 billion.

Real external debt is the amount of money a country owes to non-residents that must be paid back in the future. It includes the principal and interest on loans from foreign lenders, such as governments, commercial banks, or international financial institutions.

Speaking at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Ahmad noted that inflation had eased considerably from 2023 when it reached a record high of 38%. It is expected to range between 5% and 7% by the end of fiscal year 2024-25 (FY25), he added.

However, it would spike at the end of 2025, according to the central bank governor.

Talking about the economy, Ahmad noted that foreign exchange reserves have risen over the last year on the back of higher remittances, which are expected to reach the $35 billion-mark in FY25.

The current account has been in surplus of $944 million in five months of the current fiscal year, he added. "The current account has entered the phase of consolidation now, while back in 2017, there was a deficit of around $17 billion, equal to 4.7% of GDP."

The governor further said that the credit line for small and medium enterprises (SMEs) would be increased to PKR 640 billion from PKR 543 billion by end of FY25.

Moreover, there were plans to increase the ceiling to PKR 1,000 billion by next year.