KARACHI – Governor State Bank of Pakistan (SBP) 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 in the economy.
He was delivering his keynote address as the Chief Guest on the Members Convocation of ICMA Pakistan at a local hotel in Karachi.
Jameel Ahmad said Pakistan faced a very challenging macroeconomic environment a year ago. “Inflation reached as high as 38 per cent; the FX reserves were fast depleting; the exchange rate was under a lot of pressure; and uncertainty was quite high. However, today, inflation is coming down sharply; our reserves have risen to around US$8 billion despite heavy debt repayments and will so cross the $9 billion mark; the current account deficit has narrowed quite significantly, and as a result, the PKR is stable. Uncertainty has also been reduced. Pakistan’s bilateral and multilateral partners are continuing their support. And the stock market is reaching new highs”, he said.
The governor shared that progress was made possible because of a firm commitment of the government and the SBP to respond to the macroeconomic challenges effectively. He shared that unpopular yet necessary measures had to be taken. The State Bank raised the policy rate to 22 per cent to reduce pressure on inflation and the current account. The government also undertook fiscal consolidation by constraining non-essential current expenditures. This coordinated policy response is now yielding the desired results.
He stressed the need for fresh perspectives and innovative solutions to address the longstanding issues facing the economy. This fresh perspective and innovative thinking have become more necessary, as the global shocks facing our economy are getting increasingly complex. He shared that climate change, technological advancements, cyber security threats, and financial innovations are adding new dimensions to the risks to economic and financial stability.
