KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad said durable macroeconomic stability is essential for inclusive economic growth that benefits all segments of society, responding to criticism of low GDP growth over the past three years.

Speaking at the 9th Annual Microfinance Conference on Thursday, hosted by the Pakistan Microfinance Network, Mr Ahmad emphasised the role of microfinance in supporting broad-based economic development. The conference theme was “Renaissance of Microfinance”, highlighting renewed efforts to expand financial services to underserved communities.

The World Bank recently forecast economic growth at 2.6 per cent for FY26, drawing criticism amid rising poverty, unemployment, and weak financial performance. The governor said growth was on a recovery path and expected to strengthen further this fiscal year, despite temporary setbacks caused by recent floods, particularly in agriculture.

Says GDP growth expected to recover despite recent floods

Mr Ahmad noted that recent policy and regulatory measures have helped stabilise the economy. Inflation has fallen sharply and is projected to remain within the government’s medium-term target range of 5 to 7pc, despite some short-term pressure on prices from the floods.

On the external front, he pointed out that foreign exchange reserves have increased nearly fivefold since January 2023, thanks to strategic interbank purchases. Without these reserves, the government would have faced higher borrowing costs to meet debt obligations.

The SBP governor also outlined recent reforms to the Prudential Regulations for Microfinance Banks, shifting from a rules-based to a principle-based framework. Changes include lifting restrictions on microenterprise lending, introducing a dedicated agriculture and livestock loan category, and raising loan limits to Rs5 million for agriculture, microenterprise, and housing loans, and Rs500,000 for general loans.

Published in Dawn, October 10th, 2025