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Economic growth

Pakistan's Economy on the Path to Sustainable Growth

Strategic Insights

— 1 min read

Governor State Bank of Pakistan (SBP), Jameel Ahmad, emphasized the importance of sound macroeconomic policies and financial inclusion as pillars for Pakistan's economy at the launch ceremony of the Women Entrepreneurs Finance Code in Karachi. The Governor highlighted the country's progress in achieving economic stability, with inflation declining to 4.5% in FY25, the lowest level in nine years. He also noted that the FX market remains stable, driven by external account outperformance and a high-quality buildup of FX reserve buffers. Furthermore, the current account balance is projected to remain supportive, driven by robust remittances and resilient exports. The Governor emphasized that economic growth must be both sustainable and inclusive, with women entrepreneurs playing a crucial role in driving economic activity.

Key Takeaways:

  • The average headline inflation has declined to 4.5% in FY25, the lowest level in the last nine years.
  • SBP's FX reserves are now almost five times higher than the low levels at the start of 2023.
  • The current account balance is projected to remain supportive, driven by robust remittances and resilient exports.
  • Economic growth is showing signs of gradual, consistent, and sustainable recovery.
  • Women entrepreneurs are considered a powerful engine for economic growth and social progress.
  • Supporting Women Micro and Small Enterprises (WMSMEs) aligns closely with SBP's vision to foster a stable and inclusive financial ecosystem conducive to broad-based and inclusive growth.
  • ADB's commitment to support women financial inclusion in Pakistan has been appreciated, and the organization's role in supporting SBP in the adoption and implementation of the Code in Pakistan has been acknowledged.

Statistics:

  • Average headline inflation: 4.5% in FY25 (lowest level in the last nine years)
  • FX market stability: driven by external account outperformance and a high-quality buildup of FX reserve buffers
  • Current account balance: projected to remain supportive, driven by robust remittances and resilient exports
  • SBP's FX reserves: almost five times higher than the low levels at the start of 2023
  • Economic growth: showing signs of gradual, consistent, and sustainable recovery

Sources:

  • Press release by State Bank of Pakistan
  • Asian Development Bank (ADB)
  • State Bank of Pakistan (SBP)

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