The State Bank of Pakistan (SBP) Governor, Jameel Ahmad, has provided a cautiously optimistic outlook on the country’s economic recovery, highlighting progress in debt sustainability, inflation control, and the balance of payments.
Addressing a press briefing and an event hosted by the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Ahmad stated that Pakistan’s foreign debt stood at $100.8 billion as of September 2024, reflecting marginal revaluation adjustments since June 2022. Despite enduring one of its worst economic crises in decades, he assured that debt levels remain sustainable, supported by multilateral financing and long-term restructuring of short-term obligations.
The SBP chief noted that inflation had significantly dropped from a peak of 38% in May 2023 to 4.1% in December 2024. He expressed confidence that the inflation rate would stabilise within the central bank’s medium-term target of 5-7% by the end of 2025.
“While we have seen considerable progress in lowering inflation, fluctuations over the next 4-5 months could create challenges for businesses and households,” Ahmad said. He emphasized that achieving sustainable economic growth hinges on controlling inflation, enhancing exports, and maintaining balance of payments stability.
On the current account, Ahmad highlighted that it was “in very good condition,” thanks to stabilising remittances and a controlled trade deficit. Remittance inflows are expected to surpass $35 billion in the current fiscal year, bolstered by improved confidence in economic policies.
The SBP governor underscored the need for structural reforms to expand exports, which have not grown as expected. “Without increasing exports, current account and balance of payment challenges will persist,” he cautioned.
Ahmad also addressed foreign investors’ dividend repatriation, stating that $1.1 billion had already been repatriated this year, compared to $2.2 billion in 2024. He noted that there were no significant issues in facilitating foreign investors in this regard.
On the SME sector, Ahmad urged commercial banks to take proactive measures to support small and medium enterprises, as their growth is critical for employment generation and economic revival.
The SBP chief further revealed that Pakistan’s economy is positioned to resume full-scale activity, provided sustainable policies are implemented. “Growth exceeding 4% must be backed by sufficient foreign exchange reserves to avoid unsustainable expansion,” he said.
He reiterated the central bank’s commitment to long-term economic stability, emphasizing that maintaining fiscal discipline and achieving export-led growth were essential to securing Pakistan’s economic future.
