How Much External Debt Does Pakistan Need To Repay in FY25?

Pakistan needs to repay $24.8 billion in external debt during the current fiscal year, according to the State Bank of Pakistan (SBP). This amount includes $21.2 billion for principal repayment and $3.6 billion for interest payments. The SBP's data reveals that Pakistan will need $4.98 billion in July, $2 billion each in August and September, and $17.8 billion from October to June.

Despite these substantial repayments, the SBP expects the obligations to be managed comfortably due to improved foreign fund inflows and moderate current account deficits. The total repayment requirement for FY25 is slightly lower than the $26.2 billion previously quoted by SBP Governor Jameel Ahmad.

The SBP projects foreign exchange reserves will increase to $13 billion by the end of FY25, up from the current $9.1 billion. This improvement is attributed to expected IMF approval by August and recent dollar inflows of over $500 million.

Recent ratings updates include S&P affirming Pakistan's sovereign rating at 'CCC+' and Fitch upgrading its rating to 'CCC+', reflecting greater external funding availability under the new IMF deal. Pakistan is also negotiating with Saudi Arabia, the UAE, and China to meet financing needs.

The SBP forecasts a moderate current account deficit for FY25, with increased imports and strong growth in remittances. The fiscal year 2024 saw a significant increase in profit and dividend repatriation, totaling $2.2 billion due to the settlement of outstanding payments to foreign investors.