In remarks published by the State Bank of Pakistan from the Governor’s speech at the Pakistan Business Council’s “Dialogue on the Economy”, Jameel Ahmad argued that Pakistan needs to shift from repeated short-lived stabilization episodes to a durable, outward-looking growth model to avoid another boom-bust cycle. He framed the current stabilization phase as more resilient than past cycles, pointing to coordinated monetary and fiscal policies, stronger forward-looking forecasting and an inflation path expected to stay within the 5–7 percent target band over the medium term. The Governor highlighted a qualitative strengthening of external buffers, with reserve accumulation attributed to strategic foreign exchange purchases and reduced forward liabilities rather than debt-driven inflows. He noted that public sector external debt has been broadly stable since 2022, the external debt-to-GDP ratio has fallen from 31 percent to 26 percent, and SBP foreign exchange reserves have risen from USD 2.9 billion to around USD 14.5 billion. He also pointed to primary surpluses over the last three years and referenced ongoing reforms to raise the tax-to-GDP ratio through documentation and a wider tax base, alongside energy sector reforms, complemented by SBP work to address gaps in financial intermediation and expand financial inclusion. Looking ahead, he called on firms to rely less on subsidies and domestic protection and to integrate into global value chains by modernising production, investing in innovation and adapting to digitalisation, the green transition and supply-chain realignments. The speech also encouraged businesses to diversify funding by tapping domestic and international capital markets, strengthen digital financial operations and document supply chains to support productivity, access to finance and resilience.
State Bank of Pakistan 2025-11-26
State Bank of Pakistan Governor urges globally competitive growth model and cites FX reserves near USD 14.5 billion
State Bank of Pakistan Governor Jameel Ahmad stressed the need for Pakistan to adopt a sustainable, outward-looking growth model to avoid boom-bust cycles, emphasizing coordinated monetary and fiscal policies and stable inflation. He noted improvements in external buffers, with foreign exchange reserves at USD 14.5 billion and a reduced external debt-to-GDP ratio. Ahmad urged firms to integrate into global value chains, modernize production, and diversify funding sources to boost productivity and resilience.