Increase in inflows from overseas Pakistanis through Roshan digital accounts. Governor SBP The reduction in inflation is broad-based which is due to tight monetary policy. Meetings with IMF World Bank

Increase in inflows from overseas Pakistanis through Roshan digital accounts. Governor SBP

Governor State Bank’s briefing to foreign investors on improved economic situation of Pakistan


Governor Bank of Pakistan, Daulat Jameel Ahmed, on the sidelines of the Spring Meetings of the IMF World Bank in Washington DC organized by top global banks and financial firms including JP Morgan, Citibank and Jefferies. Met with important international investors at various events. Governor State Bank informed the participants about the significant improvement in the economic situation of Pakistan during the last one year as a result of the accommodative monetary policy, proper financial integration support and the initiation of important structural reforms. Over the year, inflation in Pakistan has declined sharply to a two-year low of 20.7 percent in March 2024 from a high of 38 percent in May 2023. He explained that the reduction in inflation is broad-based which is due to tight monetary policy, fiscal consolidation, ease of import supply, improvement in agricultural production and fundamental impact. It reflects the effects of (base effect). More importantly, core inflation eased significantly to 15.7 percent in March, which had been consistently above 20 percent throughout the year. Jameel Ahmed informed the participants that the external sector has also stabilized, which is reflected in the sharp reduction in the current account deficit to $1 billion during July-February of FY24 from last year’s eighty. 3.8 billion in the period. In addition to stabilization policies, improvements in agricultural production have contributed to higher food exports, while imports of agricultural commodities such as wheat and cotton have declined. Workers’ remittances have increased year-on-year since October 2023 due to incentives and regulatory measures to divert remittances to formal channels. This quantitative improvement in the external account allowed the State Bank to double its foreign exchange reserves from January 2023 ($3.1 billion) to nearly $8 billion as of April 12, 2024, despite the same One billion dollars was paid in the form of Eurobonds. Along with this, the State Bank’s forward liabilities have also decreased significantly and it has come down significantly from $5.7 billion in January 2023 to $3.4 billion in February 2024. Emphasized improvements, while the overall financing needs have come down due to a significant reduction in the current account deficit. Moreover, the external debt landscape has also improved as the proportion of relatively expensive and short-term commercial loans has declined while the proportion of long-term concessional financing provided by multilateral institutions and bilateral partners has increased. Jameel Ahmed also highlighted that there has been a recent increase in inflows from overseas Pakistanis through Roshan digital accounts and from other foreign investors, while under the IMF’s SBA programme. Performance has also been steady in meeting targets and benchmarks. In the future, the government is optimistic about the signing of the IMF’s long-term program, which will facilitate additional external financing and the adoption of structural reforms to address the economy’s long-term problems. The Governor also highlighted the State Bank’s efforts in providing an enabling economic environment for the private sector to invest in the economy. State Bank’s Strategic Plan 2028 aims to support growth through price stability and financial stability. The Governor State Bank pointed out that digital technologies are being widely adopted to fill the gap in access to financial services which has revolutionized the country’s payments system. He expressed hope that the economy will be on the path of sustainable growth with these reforms in the stipulated period.