Pakistan’s external debt to GDP ratio decreased to a six-year low of 26% in the last fiscal year, driven by a restrained increase in foreign currency borrowings and a significant reduction in the current account deficit. This is a notable improvement from FY23, where the external debt stood at 32% of GDP. According to data from the State Bank of Pakistan, the country’s total external debt and liabilities (EDL) increased by 3.4%, reaching $130.502 billion by June 30, 2024. Despite the rise in absolute terms, the debt burden eased relative to GDP due to better balance of payments and exchange rate stability. This reduction was further supported by a substantial decrease in the current account deficit, which plummeted from $17.48 billion in FY22 to $0.68 billion in FY24, along with an increase in foreign remittances.
