In a series of high-level engagements during the IMF–World Bank Spring Meetings in Washington, D.C., the Governor of the State Bank of Pakistan (SBP), Mr. Jameel Ahmad, provided an optimistic update on Pakistan’s macroeconomic recovery and policy reforms. Addressing senior executives from top-tier global financial institutions—including JP Morgan, Standard Chartered, Deutsche Bank, Jefferies, and major credit rating agencies—Governor Ahmad shared insights into the progress Pakistan has made toward achieving macroeconomic stability.
Governor Ahmad underscored that Pakistan’s ongoing economic turnaround is being driven by a disciplined and proactive policy mix. He emphasized that the combination of a tight monetary stance and sustained fiscal consolidation has begun yielding tangible results across key macroeconomic indicators. One of the central themes of his discussion was the significant reduction in inflation, which has plummeted to a multi-decade low of 0.7 percent by March 2025. Core inflation, which was once above 22 percent, has also declined to single-digit levels and is expected to fall further in the coming months.
Looking ahead, Governor Ahmad indicated that inflation is expected to stabilize within the SBP’s target range of 5 to 7 percent, providing a more predictable environment for investment and consumption. This disinflationary trend, he said, is complemented by steady gains in Pakistan’s external account position.
A major highlight of the Governor’s update was the significant improvement in Pakistan’s foreign exchange (FX) reserves. He revealed that the SBP’s FX buffers have more than tripled since their lowest point in February 2023, reflecting both qualitative and quantitative strengthening. Importantly, this rise in reserves is not the result of additional external borrowing—a departure from past trends—but stems from the buildup of surplus in the current account and strategic FX market operations by the central bank.
Governor Ahmad further noted that Pakistan’s forward liabilities have been reduced significantly, and public sector external debt, both in absolute terms and as a percentage of GDP, has declined since June 2022. These developments, he explained, reflect the SBP’s targeted efforts to enhance the economy’s resilience to external shocks, including trade-related disruptions in an uncertain global environment.
Setting a clear goal, the Governor stated that SBP aims to raise FX reserves to $14 billion by the end of June 2025. This target, he said, is within reach thanks to consistent policy efforts, improving investor confidence, and strengthened economic fundamentals.
On the growth front, Mr. Ahmad informed global investors that Pakistan’s real GDP is expected to grow by around 3 percent in FY25. This modest recovery is being driven by stability in the macroeconomic environment and early signs of revival in key sectors. He also highlighted that Pakistan’s progress has not gone unnoticed on the international stage, as reflected in positive assessments by global credit rating agencies.
Reaffirming the government’s commitment to long-term reform, the Governor emphasized that macroeconomic stabilization remains the cornerstone of the national policy agenda. Structural reforms across various sectors—ranging from public finance and agriculture to trade and industrial development—are being prioritized to lay the foundation for sustainable growth and socioeconomic advancement.
In his closing remarks, Governor Ahmad expressed optimism about the future. He stated that with continued reform momentum and prudent economic management, Pakistan is well-positioned to secure lasting financial stability and improved living standards for its citizens.