Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, announced that Pakistan’s economic growth is projected to exceed 3% in the current fiscal year, with expectations for further acceleration in the next year.
In a press conference on Thursday, the SBP chief emphasized the need for stable and gradual growth to avoid future balance of payments issues. He highlighted that while Pakistan’s economic growth has averaged 3.5% over the past decade, the country sometimes experiences significant growth surges, followed by challenges in subsequent years.
“The key to stable growth is gradual and consistent development,” he stated, noting that the SBP’s focus will be on managing inflation and addressing external account issues.
SBP Governor also shared the bank’s inflation target for the current fiscal year, set at 5 to 7 percent. He expressed confidence that if economic indicators improve and inflation is controlled, other sectors will benefit as well. “We hope that Pakistan’s current account remains in surplus through December,” he added.
Foreign Debt Stabilization and Remittances
The governor provided an update on Pakistan’s foreign debt, which is currently at a manageable level of $100.8 billion. While the debt has increased slightly by $500 million due to revaluation, Ahmad reassured that the overall debt situation has improved significantly since 2022.
Regarding foreign exchange inflows, he stated that remittances are stabilizing and are expected to total $35 billion by the end of this fiscal year. Exports are showing signs of improvement, though more efforts are needed to increase export volumes and reduce reliance on remittances.
Export Growth and SME Focus
“Achieving sustainable economic growth will depend on boosting exports and reducing dependency on remittances,” Ahmad emphasized. He also noted that foreign exchange reserves are being effectively used to meet the demand of foreign investors and companies. In 2023, Pakistan provided $330 million to foreign investors for dividends and profits, and this amount increased to $2.2 billion in 2024.
The governor further highlighted the government’s commitment to boosting the Small and Medium Enterprises (SMEs) sector, which he believes will be key to economic growth. Under new policies, SMEs can now obtain loans of up to Rs 10 million without collateral. The government has also increased the loan target for SMEs from Rs 543 billion to Rs 1,100 billion, with banks expected to raise SME lending by Rs 100 billion annually.
