Sign in Subscribe
Economic growth

Sustainable and Inclusive Economic Growth: State Bank Governor's Insights

Strategic Insights

— 2 min read

State Bank Governor Jameel Ahmed emphasized that economic growth is only meaningful if it is both sustainable and inclusive. He made these remarks at the launch ceremony of the Women Entrepreneurs Finance Code in Karachi, organized by the State Bank of Pakistan (SBP) and the Asian Development Bank (ADB). The governor's comments come amid criticism of the government's inability to stimulate economic growth, generate employment, and reduce poverty over the past three years. Ahmed rejected past policy missteps and highlighted the current approach's focus on long-term, sustainable growth rather than short-term, unsustainable expansions.

Key Takeaways:

  • The State Bank Governor, Jameel Ahmed, stressed the importance of sustainable and inclusive economic growth, noting that Pakistan is witnessing a gradual and consistent recovery.
  • The current policy mix is focused on transitioning from economic stability to medium-term transformation, underpinned by a prudent monetary policy, a fundamentals-aligned exchange rate, fiscal consolidation, and improved debt dynamics.
  • The central bank has achieved significant macroeconomic stability, built fiscal and external buffers, and supports long-term sustainable growth.
  • Several key indicators support this outlook, including a decline in average headline inflation to 4.5pc in FY25 - the lowest in nine years, and a stability of the foreign exchange market.
  • Strong external performance and a quality build-up of reserves have supported the foreign exchange market.
  • The current account balance is expected to remain supportive, driven by resilient exports and robust remittances.
  • Women entrepreneurs are a powerful engine for economic growth and social progress, according to Governor Ahmed.
  • The State Bank of Pakistan and the Asian Development Bank have jointly developed the Women Entrepreneurs Finance Code to support women's financial inclusion in Pakistan.
  • Governor Ahmed emphasized the central bank's commitment to structural reforms aimed at establishing the foundation for sustainable and inclusive development.

Statistics:

  • Average headline inflation has reached 4.5pc in FY25, its lowest in nine years.
  • The State Bank's foreign exchange reserves are now nearly five times higher than the lows at the beginning of 2023.
  • Resilient exports and robust remittances are expected to drive a supportive current account balance.
  • The foreign exchange market has shown stability, supported by strong external performance and a quality build-up of reserves.
  • The Women Entrepreneurs Finance Code is a joint effort between the State Bank of Pakistan and the Asian Development Bank to support women's financial inclusion.

Sources:

  • "State Bank Governor Stresses Importance of Sustainable Economic Growth" by Dawn, no date provided (Source not explicitly dated in the original text)
  • Karachi (CBS) - no source provided

Read more