KARACHI – Governor State Bank of Pakistan (SBP), Jameel Ahmad, said that structural reforms will be undertaken for sustainable and inclusive economic growth.
He was speaking at the launch ceremony of Women Entrepreneurs Finance Code jointly arranged by the SBP and the Asian Development Bank (ADB).
Jameel Ahmad said that both SBP and the government remain steadfast in their approach to transitioning from recently hard-earned economic stability to a medium-term economic transformation. “This resolve is reflected in our prudent and cautious monetary policy stance, fundamentals aligned exchange rate, and ongoing fiscal consolidation and improving debt dynamics”, he said, adding that this approach will ensure overall macroeconomic stability, building fiscal and external buffers and supporting sustainable economic growth.
He believes that this time is indeed different for Pakistan’s economy due to the following facts:
- The average headline inflation has declined to 4.5% in FY25 – the lowest level in the last nine years, and with a prudent and coordinated mix of monetary and fiscal policies, inflation will stabilise within its target range of 5 – 7 per cent.
- The FX market remains stable, driven by external account outperformance and a high-quality buildup of FX reserve buffers. SBP’s FX reserves are now almost five times higher than the low levels at the start of 2023.
- The current account balance is projected to remain supportive, driven by robust remittances and resilient exports, despite rapid growth in both the value and volume of imports in line with ongoing economic recovery.
- Fiscal policy has proactively supported monetary tightening, as reflected in the second consecutive primary surplus in FY25. Both tax and non-tax revenues have shown sizable growth, while overall expenditures have remained relatively contained. The GOP is targeting a higher primary surplus for FY26. Economic growth is showing signs of gradual, consistent, and sustainable recovery.
Mr. Ahmad said that, unlike in the previous episodes of boom-bust cycles, the current policy mix remains conducive to a lasting increase in economic activity rather than a short-sighted, fragile, and populist ‘sugar rush’.
