KARACHI, Feb 1: The State Bank of Pakistan has clarified a new item which appeared in a section of the Press on Saturday quoting SBP Governor, Dr Ishrat Husain as saying that the debt servicing would be reduced to 25 per cent of government budget by the year 2004-05.

According to SBP chief spokesman here on Saturday, the governor in his speech at the Daily Times seminar held on Friday had referred to the external debt servicing declining to 25 per cent of foreign exchange earnings by 2004-05.

This was not 25 per cent of government budget, although he did state that the fall in debt servicing would create more fiscal space for increasing development expenditure to Rs180 billion by 2004-05.—APP