State Bank of Pakistan (SBP) Governor Jameel Ahmad, today delivered a stark message to the nation’s business leaders, declaring that Pakistan stands at a critical “inflection point” and must urgently shift away from its historical boom-bust economic cycles by embracing global competitiveness over domestic protectionism.
Speaking at the Pakistan Business Council’s (PBC) ‘Dialogue on the Economy,’ the governor stressed that while Pakistan has repeatedly endured phases of growth followed by painful stabilization, the current moment offers a genuine opportunity for lasting transformation, contingent upon sustained policy continuity and private sector adaptability.
Mr. Ahmad detailed why the current stabilization phase is distinct from previous efforts, attributing its strength to well-coordinated, forward-looking monetary and fiscal policies that have avoided the premature easing that historically undermined stability. He noted that the central bank’s enhanced forecasting capacity allows decisions to be anchored in eight-quarter projections, leading to more robust policymaking.
“Inflation has not only fallen in line with our forecast but is expected to remain within the 5-7 percent target band over the medium term,” he asserted.
A significant pillar of the improved economic footing, the governor highlighted, is the qualitative strengthening of the nation”s external buffers. He contrasted the current reserve accumulation, driven by strategic foreign exchange purchases and reduced forward liabilities, with past reliance on debt-driven inflows. SBP’s FX reserves have surged nearly fivefold from a low of USD 2.9 billion to approximately USD 14.5 billion, while the external debt-to-GDP ratio has fallen from 31 percent to 26 percent since 2022.
On the fiscal front, Mr. Ahmad pointed to the government’s consistent achievement of primary surpluses over the last three years, which has helped place public debt on a more sustainable trajectory. He also cited ongoing long-term structural reforms, including efforts to increase the tax-to-GDP ratio through economic documentation and a widening of the tax base, alongside energy sector reforms aimed at lowering costs.
However, the governor cautioned that the historical growth average of 3-4 percent is no longer adequate to support a population exceeding 250 million. He underscored a growing consensus that sustainable prosperity requires reorienting policymaking toward a long-term vision rather than pursuing the short-term, consumption-led growth spurts of the past.
In a direct appeal to the private sector, Governor Ahmad urged businesses to integrate into global value chains, modernize production processes, and invest in innovation. He identified rapid digitalization, the green transition, and global supply-chain realignments as key windows of opportunity for adaptable Pakistani firms, encouraging them to leverage partnerships with the US, China, and Middle Eastern economies.
He also advised businesses to diversify their funding by tapping domestic and international capital markets and to adopt advanced digital tools in their financial operations. Special emphasis was placed on the documentation of supply chains, which he described as an essential step for boosting productivity, improving access to finance, and building resilience.
Concluding his remarks, Mr. Jameel Ahmad called for a unified approach. “We cannot expect different results by doing more of the same. The stability we have achieved must now serve as the foundation for long-term prosperity. Only by moving together-government, SBP, and the private sector-we can secure a future of sustained and inclusive growth.”