Pakistan's economic outlook improves

SBP chief says there are no curbs on imports, banks will give more loans to agri-sector, SMEs

KARACHI:

State Bank of Pakistan (SBP) Governor Jameel Ahmad has emphasised that the country's economic outlook has got better, following improvement in macroeconomic indicators, caused by measures taken by the government and central bank.

In his message read out by Executive Director Muhammad Haroon Rasheed at Independence Day celebrations at the SBP, the governor pointed out that inflation had significantly decreased to 11.1% in July 2024, down from 28.3% in July 2023.

Highlighting the country's previous struggle with macroeconomic indicators, he noted that the current account deficit had widened to $17.48 billion in fiscal year 2021-22, which contracted to $3.2 billion in FY23 and further reduced to $0.68 billion in FY24.

In addition, foreign remittances increased to $30.25 billion in FY24 from $27.33 billion in FY23.

The SBP governor said foreign currency reserves had improved, rising to $9.3 billion despite ongoing debt repayments.

Furthermore, there have been no import restrictions and IT exports have risen significantly.

These improvements, he emphasised, bode well for Pakistan's economy.

He added that banks had developed plans to provide more loans to agriculture and small and medium enterprise (SME) sectors compared to last year to harness the potential in those areas.

He outlined the SBP's efforts to ensure access to financial services for the general public, including initiatives such as the National Financial Inclusion Strategy, the National Financial Literacy Programme, and Banking on Equality.

He also highlighted Raast, Pakistan's first instant payment system, which enables end-to-end digital payments among individuals, businesses and government entities, as well as the Asaan Mobile Account, which allows the general public, especially low-income segments, to open branchless banking accounts digitally.

Ahmad underscored the need for adopting new and innovative strategies to resolve perennial economic issues.

In the context of digital innovations and emerging cybersecurity threats, he stated that the SBP was actively addressing the challenges and urged the banking industry to upgrade their systems to enhance cybersecurity and inform their customers to protect their credentials from potential fraudsters.

He also mentioned that the SBP organised the first edition of Pakistan Financial Literacy Week in March this year. The theme for the week was "Digital Bankari – Fori aur Asaan" aimed at leveraging the potential of digital solutions to equip individuals with the knowledge and tools necessary to make informed financial decisions.