KARACHI: Governor State Bank of Pakistan Jameel Ahmad has said that the firm commitment of the government and the SBP to respond to the macroeconomic challenges has resulted in significant improvement and the economy is on the path to recovery amid global challenges.
The SBP governor, while delivering a keynote address to the Members Convocation of ICMA Pakistan late Saturday night, highlighted the recent improvement in Pakistan’s economy and said that it was worth taking a step back and analyzing where the economy was standing and where it was headed.
Pakistan’s Economic Indicators
Referring to the challenging macroeconomic environment the country was facing a year ago, he said that inflation had reached 38%, the forex reserves were fast depleting, the exchange rate was under heavy pressure and uncertainty was quite high.
However, today, inflation is coming down sharply, Pakistan’s reserves have risen to around $8 billion despite heavy debt repayments and will so cross the 9 billion dollars mark, and the current account deficit has narrowed quite significantly, he said.
As a result, the Rupee is stable while the stock market is reaching new highs, he added.
he said that uncertainty has also reduced and Pakistan’s bilateral and multilateral partners are continuing their support.
The governor said that unpopular yet necessary measures had to be taken as the SBP raised the policy rate to 22%, in order to reduce pressure on inflation and the current account.
He added that the government also undertook fiscal consolidation by reducing non-essential current expenditures and the coordinated policy response was now yielding the desired results.
He emphasized the need for fresh perspectives and innovative solutions to address the longstanding problems facing the economy and said that fresh perspectives and innovative thinking have become more necessary, as the international shock facing the economy is getting increasingly complex.
He said that climate change, cyber security threats, technological advancements, and financial innovations are adding new dimensions to the risks to economic and financial stability.
