KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad reaffirmed Pakistan’s improving macroeconomic stability and outlook during high-level meetings on the sidelines of IMF/World Bank Spring Meetings in Washington.
According to a press release issued by the central bank, the SBP chief met senior executives from global financial and investment institutions, including JP Morgan, Standard Chartered, Deutsche, Jefferies, and major credit rating agencies and briefed them on the tangible progress Pakistan has made in stabilising its economy.
He highlighted that a prudent monetary policy, combined with sustained fiscal consolidation efforts, has led to macroeconomic stability in the country.
Mr Ahmad highlighted that headline inflation has declined sharply over the past two years, reaching a multi-decade low of 0.7 per cent in March.
Moreover, core inflation has also come down significantly from above 22pc to a single digit and is expected to moderate further in the coming months. He added that the headline inflation is expected to stabilise within its target range of 5 to 7pc.
Regarding the external account, the SBP governor said Pakistan’s foreign exchange buffers had registered a substantial qualitative and quantitative improvement. SBP’s reserves have tripled since bottoming out in February 2023, whereas its forward liabilities have also reduced significantly.
Mr Ahmad highlighted that, unlike previous episodes of reserve build-up, the ongoing rise in external buffers is not due to any further accumulation of external debt. Pakistan’s public sector external debt, both in absolute terms and as a per cent of GDP, has declined since June 2022. The governor emphasised that this improvement reflects SBP’s policy focus on building the economy’s resilience against external shocks, including the ongoing trade-related global uncertainty. He explained that SBP has built these buffers through forex purchases amidst a surplus in the external current account. He also shared that SBP is targeting to increase FX reserves to $14bn by June 2025.
Published in Dawn, April 27th, 2025
