Pakistan’s economy is steadily gaining momentum, with inflation rates projected to decline further in the coming months, according to the Governor of the State Bank of Pakistan (SBP), Jameel Ahmed. Speaking at a recent gathering hosted by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Ahmed highlighted the improving economic indicators and underlined the efforts contributing to this progress.
Key Economic Indicators Show Positive Trends
The SBP governor shared that Pakistan is on course to achieve its economic targets, attributing this to the nation’s improved balance of payments and stable debt levels. In December 2024, inflation rates dropped to 4.1%, and a continued decline is anticipated in January. This development is expected to lead to a reduction in interest rates, offering much-needed relief to businesses and households alike.
Ahmed credited these improvements to an increase in exports and remittances, which have collectively bolstered the current account balance. The enhanced flow of foreign funds has strengthened Pakistan’s economic stability, paving the way for sustainable growth.
Debt Management and Structural Reforms
Highlighting Pakistan’s debt management progress, Ahmed revealed that the country has successfully maintained its total debt at approximately $100 billion. Significant strides have been made, such as paying $2 billion towards Eurobond obligations and transitioning from short-term to long-term debt arrangements. These measures aim to ease fiscal pressures and secure long-term economic stability.
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FPCCI Calls for Reduced Interest Rates
During the event, FPCCI President Atif Ikram Sheikh advocated for a reduction in interest rates to single digits, stating that the current double-digit rates are no longer justified given the falling inflation. He emphasized the importance of affordable credit to stimulate economic activities, particularly for trade, industry, and small and medium-sized enterprises (SMEs).
Export-Led Growth: A Sustainable Path Forward
Both the SBP governor and FPCCI members stressed the critical role of export-led growth in driving Pakistan’s economic recovery. They urged policymakers to implement strategies that promote exports, reduce trade barriers, and provide businesses with affordable financing options. By doing so, the country can strengthen its position in global markets and achieve long-term economic stability.
Pakistan’s improving economic indicators, coupled with sound policies and increased export activity, signal a brighter outlook. While challenges remain, the nation’s focus on sustainable growth strategies offers hope for a stable and prosperous future.
