Economic conditions show improvement: SBP governor

KARACHI: The State Bank of Pakistan said on Wednesday that the country’s economic indicators have improved as a result of measures implemented by both the government and the central bank, leading to a better economic outlook, a statement said.

The 77th Independence Day was celebrated at the SBP with renewed fervour and enthusiasm. The formal proceedings began with the hoisting of the national flag, as the Navy band played the national anthem.

The SBP’s governor, Jameel Ahmad’s message which was read out by Executive Director Muhammad Haroon Rasheed, praised the immense sacrifices made by the founding fathers in establishing a separate homeland for Muslims of the Indian subcontinent. His message focused on improvements in macroeconomic indicators.

In his message, Ahmad pointed out that inflation had significantly decreased to 11.1 per cent in July this year, down from 28.3 per cent in July 2023. He highlighted the country’s previous struggles with macroeconomic indicators, noting that the current account deficit, which was $17.48 billion in FY22, had been reduced to $3.2 billion in FY23, and further to $0.68 billion in FY24.

Foreign remittances have now increased to $30.25 billion in FY24 from $27.33 billion in FY23. The governor also noted that the situation regarding foreign reserves has improved, with reserves rising to $9.3 billion despite ongoing debt repayments. Also, there have been no import restrictions, and IT exports have risen significantly. These improvements, he emphasized, bode well for the country’s economy.

Banks have developed their plans to issue more loans to the agriculture and SME sectors compared to last year, to harness the potential in these areas. He emphasized the SBP’s efforts to ensure access to financial services for ordinary people, 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 people, especially low-income segments, to open branchless banking accounts digitally. Ahmad stressed the need for adopting new and innovative strategies to resolve perennial economic issues. Particularly in the context of digital innovations and emerging cybersecurity threats, he stated that the SBP is actively addressing these challenges and urged the banking industry to upgrade its systems to enhance cybersecurity and inform its customers in advance to protect their credentials from potential fraudsters.

He also mentioned that the SBP observed the first edition of the 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.

People were also provided with information regarding digital financial services such as Raast, QR codes, and Asaan mobile and digital accounts.