Delivery of a central address to the ninth annual microfinance conference in Karachi, the Governor of the Pakistan State Bank (SBP) Jameel Ahmad underlined signs of "resistant macroeconomic stability," reporting a sharp decline in inflation, improved foreign exchange reserves and growth recovery. However, the reality on the ground, mentioned by international institutions and economists, says a strongly different story. According to an official statement issued on Thursday, Ahmad noted that the difficult but necessary political and regulatory measures taken in recent years have led to a period of macroeconomic stability. While pointing out the improvements to Pakistan’s macroeconomic indicators, he said inflation has been heavily reduced and is expected to remain within the Government of a target of a target of 5-7% in the medium term, despite the temporary upward pressure on prices due to recent floods, he reads the statement. Speaking to Express Tribune, economist Muzzammil Aslam likened Pakistan’s current financial situation to that of a weak hospital whose stomach pain is treated, but overall health remains critical. "If a patient comes with stomach pain and the hospital finds kidney stones, then after partial treatment says the pain is gone – can we say that his overall health is fine? No, it’s still very bad, even worse than before," He said, drawing on parallels in Pakistan’s financial situation. Aslam noted that unemployment is growing, while over 45% of the population has decreased below the poverty line. He added that taxes are at a high level of all time, while electricity invoices are one of the highest in the world, making it more difficult to carry out businesses in Pakistan. The event was hosted by Pakistan’s microfinance network and the conference focused on the subject "Regeneration of microfinance," Underlining the renewed commitment to leveraging microfinance for economic growth without exclusion. As for the outdoor sector, the SBP governor pointed out that the country’s foreign exchange reserves are now almost five times higher than the level recorded in February 2023, reflecting strategic foreign exchange markets between the currency to promote buffers. Added that "If we did not create our reserves from interbank markets, the government would have to borrow significantly higher amounts – with higher interest rates – to make timely debt repayments."
Ahmad said SBP’s monetary policy and regulatory efforts are supplemented by prolonged fiscal integration by the government, which helped limit the pressure of demand in inflation and external account. As a result, the country’s debt dynamics have improved significantly over the last three years. He said economic growth is on the road to recovery and is expected to be further accelerated during the current use, despite the temporary expected losses from recent floods, mainly in the agriculture sector. An employee of the Pakistani Stock Exchange Association (ECAP), speaking to Express Tribune under the condition of anonymity, warned that the ongoing US dollar market from the open market could have long -term impact on the economy. He explained that Pakistan depends to a large extent on the introduction, with almost 35-40% of raw materials from abroad for both export-oriented industries and domestic industries. "If the exchange rate is artificially maintained, it creates a wavy effect on exports and local goods produced," He said. The official added that the highest cost of importing oil and even minor fluctuations in rupee value could increase the national debt burden on RS7-8 trillion, stressing that the exchange rate must be determined by the market forces. He also claimed that the government is buying dollars from the open market to calm exporters, while exchange companies sell over 95% of its SBP dollars. "If SBP stops buying, the dollar rate will be reduced automatically as prices are driven by supply and demand," Noted. Commenting on exports, the employee noted that even when Rupia traded about RS250 per dollar, export volumes remained largely unchanged. "Despite the 35%discount, exports did not increase significantly. With only one motivation of 2%, remittances may have doubled," added. Aslam also pointed out that exports are declining, foreign investment remain negligible and despite government festivals for Pakistan’s stock market performance, foreign investors have unloaded $ 250 million in January. Referring to World Bank estimates, ASLAM said the floods of 2022 caused $ 65 billion losses, while the Federal Revenue Council (FBR) recorded a tax deficit of 200 billion in the past three -month -olds. He criticized the optimistic depiction of the central bank’s economy, arguing that the realities of the territory are telling a different story and emphasized the urgent need for deep structural reforms to revitalize sustainable development. The World Bank has recently provided Pakistan’s actual GDP growth to remain about 2.6% for FY2025-26, much lower than government expectations, as the country continues to face deeply rooted structural and external challenges.
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