The Governor of the State Bank of Pakistan, Jameel Ahmad, stated on Wednesday that the external debt-to-GDP ratio of the country has decreased to 26 percent in fiscal year 2025 (FY25), a reduction from 31 percent a few years prior. He credited the positive change to a lower reliance on foreign loans due to a substantial increase in remittances from overseas workers.
Speaking to the media on the sidelines of the SBP’s celebration of “Pakistan Women Entrepreneurship Day 2025,” Ahmad noted that Pakistan’s total external debt “has stayed unchanged for the past three years at the June 2022 level,” contrary to the perception that it had increased. He added that all foreign financing obtained between FY22 and FY25 was used entirely to service old external debt rather than to build foreign exchange reserves.
He noted that between FY15 and FY22, external financing grew by an average of $6.4 billion each year. At the same time, the domestic economy expanded to $407.10 billion in FY25, an increase from $375 billion in FY22.
Ahmad mentioned that the rise in workers’ remittances over the last three years significantly contributed to reducing the country’s dependence on external borrowing. Remittances reached a record $38.3 billion in FY25, up from $30.3 billion in FY24, marking a 27 percent increase compared to the previous year. He also anticipated that remittances would surpass the $40 billion threshold in the ongoing fiscal year of 2025–26.
In response to a question, the SBP chief confirmed that Pakistan’s imports had risen, totaling $5.2 billion in November 2025. However, he dismissed worries that the current account deficit would go beyond the estimated one percent of GDP. He noted that between FY15 and FY22, external financing grew by an average of $6.4 billion each year. At the same time, the domestic economy expanded to $407.10 billion in FY25, an increase from $375 billion in FY22.
Ahmad mentioned that the rise in workers’ remittances over the last three years significantly contributed to reducing the country’s dependence on external borrowing. Remittances reached a record $38.3 billion in FY25, up from $30.3 billion in FY24, marking a 27 percent increase compared to the previous year. He also anticipated that remittances would surpass the $40 billion threshold in the ongoing fiscal year of 2025–26.
In response to a question, the SBP chief confirmed that Pakistan’s imports had risen, totaling $5.2 billion in November 2025. However, he dismissed worries that the current account deficit would go beyond the estimated one percent of GDP. “The current account deficit will stay within the July 2025 forecast of 0–1 percent of GDP,” he stated.
He additionally pointed out that bank lending to small and medium-sized enterprises (SMEs) had grown by Rs150 billion in the past year, reaching Rs700 billion. He remarked that this increase was stronger than expected. Pakistan previously aimed to double SME financing to Rs1.1 trillion over five years, compared to Rs550 billion the previous year.
He additionally pointed out that bank lending to small and medium-sized enterprises (SMEs) had grown by Rs150 billion in the past year, reaching Rs700 billion. He remarked that this increase was stronger than expected. Pakistan previously aimed to double SME financing to Rs1.1 trillion over five years, compared to Rs550 billion the previous year.