Charter of the Economy The bottom line is that the size of the current account deficit has been limited to$1.8 billion in 2020-21. Three years ago, it was almost$20 billion in 2017-18. Therefore, there has been a big success in controlling the deficit. It is below 1 percent of the GDP in 2020-21. The current account deficit is projected to remain below 3 percent of the GDP thereafter. 18.5. Estimation of External Financing Requirements The external financing requirements during a particular year are the sum of the following: (1) Current Account Deficit (2) External Debt Repayment (3) Reserves Build-up less the non-debt creating inflows, like foreign investment. The projected magnitude of external financing requirements is given in Table 18.5. They are expected to be met by external borrowing of$14.1 billion in 2020-21 rising to$20.5 billion by 2024-25, with a growth rate annually of 9 percent. The net implication of the gross external borrowing minus the external debt repayment is the increase in the external debt. As shown in Table 18.5, the total external debt of Pakistan, both public and private, is expected to rise from close to$119 billion at the end of 2020-21 to almost$ 142 billion by the end of 2024-25. The external debt to GDP ratio is expected to fall somewhat to below 38 percent of the GDP. Table 18.5: Projection of External Financing Requirement* Current Account Deficit External Debt Repayment Reserve Build Up TOTAL EXTERNAL FINANCING REQUIREMENT Non-Debt Creating Inflow/ debt relief EXTERNAL BORROWING REQUIREMENT PROJECTED EXTERNAL DEBT External Debt as% of GDP Source: SBP, IMF, Estimated 2020-21 1.8 8.2 5.6 15.6 2021-22 6.5 11.3 1.5 19.3 2022-23 7.5 12.5 1.5 21.5 1.5 3.0 4.0 14.1 16.3 17.5 118.7 123.7 128.7 38.8 38.9 38.7 * Excluding the Private Sector ($ million) 2023-24 8.0 2024-25 9.5 13.0 13.5 2.0 2.5 23.5 25.5 4.5 5.0 19.0 20.5 134.7 38.1 141.7 37.8 180