KARACHI: State Bank Governor Jameel Ahmed on Monday stressed that economic growth holds little significance unless it is both sustainable and inclusive, noting that Pakistan is witnessing signs of gradual and consistent recovery.

He was addressing the launch ceremony of the Women Entrepreneurs Finance Code in Karachi, jointly organised by the State Bank of Pakistan (SBP) and the Asian Development Bank (ADB).

The governor’s remarks come amid growing criticism of the government’s inability over the past three years to stimulate economic growth, generate employment, and reduce the number of people living below the poverty line.

Rejecting past policy missteps, Mr Ahmed said that the current approach avoids short-term, unsustainable expansions. “Unlike 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’,” he stated.

Says current policy mix better than previous boom-bust cycles

He said both the SBP and the government are committed to transitioning from recently achieved economic stability to medium-term transformation, underpinned by a prudent monetary policy, a fundamentals-aligned exchange rate, fiscal consolidation, and improved debt dynamics.

“This approach is helping us maintain macroeconomic stability, build fiscal and external buffers, and support long-term sustainable growth,” he added.

Mr Ahmed reaffirmed the central bank’s commitment to structural reforms aimed at establishing the foundation for sustainable and inclusive development. “With the focus increasingly shifting towards reforms, I believe this time is different for Pakistan’s economy,” he said.

He pointed to several key indicators supporting this outlook, including a decline in average headline inflation to 4.5pc in FY25 — the lowest in nine years. He expressed confidence that with continued coordination between monetary and fiscal policy, inflation would stabilise within the 5-7pc range.

He also highlighted the stability of the foreign exchange market, which he said had been supported by strong external performance and a quality build-up of reserves. “SBP’s foreign exchange reserves are now nearly five times higher than the lows at the beginning of 2023,” he noted.

Despite a rise in import value and volume due to economic recovery, the current account balance is expected to remain supportive, driven by resilient exports and robust remittances.

The SBP governor also appreciated ADB’s continued support for women’s financial inclusion and acknowledged the bank’s role in developing and implementing the Women Entrepreneurs Finance Code in Pakistan. “Women entrepreneurs are a powerful engine for economic growth and social progress,” he remarked.

Published in Dawn, July 8th, 2025