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State Bank of Pakistan (SBP) Governor Jameel Ahmad has expressed optimism about the country’s economic outlook, attributing the positive shift to effective measures implemented by the government and central bank. His message, delivered by Executive Director Muhammad Haroon Rasheed during Independence Day celebrations at the SBP, outlined significant improvements in macroeconomic indicators.
Decline in Inflation and Reduction in Current Account Deficit
Governor Ahmad highlighted a substantial decrease in inflation, which dropped to 11.1% in July 2024, a significant improvement from 28.3% in July 2023. This reduction is a key indicator of stabilizing economic conditions in the country.
The governor also noted the shrinking of the current account deficit, which had previously widened to $17.48 billion in the fiscal year 2021-22. This deficit contracted to $3.2 billion in FY23 and further reduced to $0.68 billion in FY24, reflecting better management of the country’s external balances.
Growth in Foreign Remittances and Reserves
Foreign remittances saw a notable increase, rising to $30.25 billion in FY24 from $27.33 billion in FY23. This boost in remittances, coupled with an improvement in foreign currency reserves, which climbed to $9.3 billion despite ongoing debt repayments, has strengthened Pakistan’s economic position.
The governor emphasized that there have been no import restrictions, and IT exports have grown significantly, indicating a positive trend in the country’s trade dynamics.
Focus on Agriculture and SME Sectors
Governor Ahmad also announced that banks have developed plans to extend more loans to the agriculture and small and medium enterprise (SME) sectors compared to last year, aiming to tap into the potential of these crucial areas of the economy.
Financial Inclusion and Digital Innovations
The SBP is committed to enhancing access to financial services through initiatives like the National Financial Inclusion Strategy, the National Financial Literacy Programme, and Banking on Equality. Ahmad highlighted the success of Raast, Pakistan’s first instant payment system, and the Asaan Mobile Account, which facilitates digital branchless banking for low-income segments of the population.
Cybersecurity and Financial Literacy
Acknowledging the rise of digital innovations and emerging cybersecurity threats, the governor stressed the importance of upgrading cybersecurity measures within the banking industry. He urged banks to enhance their systems and educate customers on protecting their credentials from potential fraudsters.
The SBP also organized the first edition of Pakistan Financial Literacy Week in March 2024, focusing on “Digital Bankari – Fori aur Asaan,” to empower individuals with the knowledge and tools needed for informed financial decision-making.
