SBP governor says fundamentals improved despite global shocks

State Bank of Pakistan Governor Jameel Ahmad said on Wednesday that the country's economic fundamentals had improved significantly despite severe global and regional shocks, citing inflation close to target, a stable external account and recovering growth.

He was speaking at the annual convocation of the Institute of Cost and Management Accountants of Pakistan (ICMAP) in Karachi, as reported by Dawn and The Express Tribune.

"Despite the significant supply shocks, we have managed to contain the impact on the domestic economy," Mr Ahmad said, adding that "we have come a long way since 2022". According to Dawn, he said inflation remained close to the target range in FY26 and, while it has risen since then, is projected to ease gradually towards the target.

On the external account, the governor said the current account deficit is expected to stay within 0-1 per cent of GDP. Real GDP growth, he said, had recovered from a contraction in FY23 to 3.7 per cent in FY26, and he expected it to rise further in the current fiscal year. He said the improvements were being recognised by international credit rating agencies, multilateral partners and foreign investors.

Mr Ahmad defended the adjustment decisions taken in FY22 and FY23, saying timely and decisive action, fiscal discipline and forward-looking, evidence-based policymaking had strengthened Pakistan's resilience. Raising the policy rate and holding it for almost a year, together with temporary measures to manage non-debt foreign exchange outflows, had been necessary to restore macroeconomic stability and avert a deeper external financing and debt crisis, he said.

The Express Tribune reported that he warned against short-term fixes at the expense of long-term stability. He said a positive forward-looking real policy rate had helped bring inflation down from above 30 per cent to within the medium-term target range, and that risk-based supervision had improved the identification of financial stability risks, with financial sector adequacy and performance indicators improving despite elevated policy rates.

Addressing the graduating students, the governor urged them to let evidence guide their judgement and professional ethics define their conduct. He said he was confident their training would help shape Pakistan's future economic landscape, and that the accounting and finance profession had a vital role in strengthening institutions, promoting accountability and ensuring informed decision-making.