Karachi, January 27, 2025 – The State Bank of Pakistan (SBP) has announced its plan to initiate the printing of new currency notes featuring advanced security enhancements in the upcoming fiscal year, 2025-26.
According to Arif Habib Limited, SBP Governor has confirmed that the design process for these upgraded notes is already underway. This meticulous work is expected to conclude within the current fiscal year, FY25, paving the way for production to commence in FY26. These measures aim to bolster security and reduce counterfeiting, ensuring the resilience of Pakistan’s currency.
In a broader economic context, Pakistan faces substantial external debt obligations in FY25, totaling USD 26.1 billion. This comprises USD 22.1 billion in principal repayments and USD 4 billion in interest payments. Of this, USD 12.3 billion is anticipated to be rolled over, while USD 3.7 billion is expected to be sourced through commercial loans. The remaining USD 10.1 billion, of which USD 6.4 billion has already been repaid, leaves USD 3.7 billion to be settled over the next five months. Financing for this balance is expected through a combination of commercial and multilateral loans.
The SBP projects real GDP growth between 2.5% and 3.5% for FY25, with average inflation forecasted to range between 5.5% and 7.5%. Despite falling headline inflation, core inflation remains persistent, with risks stemming from volatile global oil prices, supply chain disruptions, and domestic taxation measures. The central bank expects inflationary pressures to rise in the final quarter of FY25 due to the base effect.
On the external front, the SBP’s reserves are projected to exceed USD 13 billion by the end of FY25, marking an improvement from the current level of USD 11.4 billion. The current account balance is forecasted to remain within the range of -0.5% to +0.5%, driven by better-than-expected reserve accumulation and reduced repayment obligations in the latter half of FY25.
High-frequency indicators suggest an overall economic recovery, although construction activity continues to lag. The SBP also foresees a decline in profits for FY26 compared to FY25, primarily due to expected reductions in interest rates.
These developments reflect Pakistan’s focused efforts to stabilize its economy, enhance financial resilience, and implement structural reforms in challenging times.