The Governor of the State Bank of Pakistan, Jameel Ahmad, told the National Assembly’s Finance Committee that foreign exchange reserves might cross $13bn by June 2025. However, Pakistan faces external debt payments worth $26.2bn during the current fiscal year.
Inflation and Economic Growth Concerns
Governor Jameel Ahmad stated that the State Bank aims to bring inflation down to single digits (7%) by next year. He said this is not enough as it was projected at 3.5% this year. While acknowledging efforts to stabilize the economy by committee members who demanded further cuts in interest rates to stimulate economic activities.
During a briefing about the country’s economic situation, he said out of the $26.2 billion foreign debt that has to be paid back this year, only $12.3 billion will be rolled over. At the same time, the rest should be repaid in dollars or bonds. Secretary Finance Imdadullah Bosal added that already $1.4 billion had been paid last month, and another $8.5 billion has to be cleared by June, which is hoped will get refinanced after repaying a commercial loan from China worth $4bn.
Foreign Loans and Financial Stability
According to reports, Pakistan expects to receive $4.4 billion in loans from the World Bank and the Asian Development Bank (ADB) within this fiscal year, with more financing planned from the IMF and other sources. He also mentioned inflation, which peaked at 38% and is now declining towards 11.1% and will likely fall between 5-7% next fiscal year.
He shared SBP’s five-year plan, under which the average annual inflation rate should remain around 7% from 2024 to 2028. Meanwhile, the current account deficit must not exceed one percent negative. Likewise, foreign reserves ought to cover three months’ import bill by then. Besides, exports must grow to equal fifteen percent of GDP to ensure financial stability and transparency.
Challenges in the Benazir Income Support Programme
The Chairperson of BISP highlighted ongoing issues regarding corruption and bribery in the distribution of funds. He said that after the new survey. Which targets updating the list, 15-20% of existing beneficiaries may get excluded, as per officials. Currently, there are around 9.3 million registered people with the program. At the same time, the new survey will push this figure up to a million by September. When it is expected to be completed.
Regarding the budget, the finance secretary told the committee that PKR 598bn had been allocated towards BISP during the current financial year. Out of which PKR 6 billion are administrative expenses. Hence, the rest will be distributed among recipients. However, due to limited financial resources, the size cannot be enhanced further despite demand.
Political Tensions During Meeting
The meeting witnessed a heated debate between Umar Ayub and Bilal Azhar Kayani over political matters, which turned into an argument. This led Umer Ayub to pressure opposition member Mubeen Arif not to join PTI. This resulted in a walkout by members, including Ayub, Arif, etc. Reflecting the challenges faced by the committee in handling pressing economic/social matters under such circumstances.
