- The head of the SBP expresses his hope for greater stability in the economy.
- Jameel says SBP is dedicated to achieving its inflation targets.
- He highlights the importance of boosting exports.
KARACHI: Inflation may fall further this month, but it may fluctuate in the coming months, State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Thursday.
Speaking before the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the SBP Governor expressed hope for greater stability in the economy and informed the forum that the balance of payments and the country’s debt level was contained and that economic objectives were achieved. News reported.
He cited the notable decline in inflation, which fell to 4.1% in December 2024, from 38% earlier in the year.
Jameel said the central bank was still committed to achieving its inflation targets, which should translate into lasting economic stability. However, he warned that inflationary volatility could present short-term difficulties for consumers and businesses.
The SBP governor described the current account situation as positive as it showed notable improvements due to increased exports and remittances.
While acknowledging the growth in remittances, which is expected to comfortably reach $35 billion by the end of the fiscal year, he stressed the importance of boosting exports to ensure lasting economic stability. Without a steady increase in export volumes, the country could continue to face difficulties in managing its current account and balance of payments.
On external debt, the SBP governor revealed that Pakistan’s external debt remained stable, standing at $100.8 billion as of September 2024, with the marginal increase attributed to revaluation adjustments. He stressed that the biggest challenge facing the authorities was the balance of payments; however, he said the country had enough dollars to meet external demands.
He pointed out that the balance of payments problem arises “when we exceed 4% growth and we don’t have the foreign exchange capacity to match it, then growth becomes unsustainable.” “Growth must be sustainable, because if it is not, we will be back to square one,” he said, stressing that exports should be increased to make growth sustainable.
On the business side, the SBP chief hopes business confidence will improve and foreign direct investment will follow once the economy recovers.