The State Bank of Pakistan (SBP) is prioritizing structural reforms aimed at fostering sustainable and inclusive economic growth, according to Governor Jameel Ahmad. Speaking at the launch ceremony of the Women Entrepreneurs Finance Code in Karachi, organized in collaboration with the Asian Development Bank (ADB), Governor Ahmad highlighted the central bank's commitment to long-term economic transformation. The event brought together prominent national and international figures who voiced their support for women's economic empowerment in Pakistan.
Governor Ahmad emphasized that both the SBP and the government are dedicated to transitioning from recently achieved economic stability to a more comprehensive medium-term economic transformation. This commitment is reflected in the country's prudent monetary policy, market-aligned exchange rate, ongoing fiscal consolidation, and improving debt management. These measures, he explained, are crucial for ensuring overall macroeconomic stability, building robust fiscal and external buffers, and supporting sustainable economic growth.
Shifting the focus towards necessary structural reforms, Governor Ahmad expressed optimism about the future of Pakistan's economy, citing several key factors:
- Declining Inflation: The average headline inflation has decreased significantly, reaching its lowest level in nine years. With a coordinated approach to monetary and fiscal policies, inflation is expected to stabilize within the target range.
- Stable Foreign Exchange Market: The foreign exchange market remains stable, driven by strong external account performance and a substantial buildup of foreign exchange reserve buffers. The SBP's foreign exchange reserves have increased dramatically since the beginning of 2023.
- Supportive Current Account Balance: The current account balance is projected to remain favorable due to robust remittances and resilient exports, despite the growth in import value and volume associated with the ongoing economic recovery.
- Proactive Fiscal Policy: Fiscal policy has actively supported monetary tightening, as evidenced by consecutive primary surpluses. Both tax and non-tax revenues have demonstrated significant growth, while overall expenditures have been managed effectively. The government aims for an even higher primary surplus in the coming fiscal year.
- Gradual Economic Recovery: Economic growth is showing signs of a gradual, consistent, and sustainable recovery.
Governor Ahmad contrasted the current policy approach with previous boom-bust cycles, asserting that the current policy mix is designed to promote lasting economic growth rather than a temporary surge.
He underscored the importance of inclusive growth, stating that economic progress should benefit all segments of society. Women entrepreneurs, he noted, are a powerful catalyst for economic growth and social advancement. Supporting women-owned micro, small, and medium enterprises (WMSMEs) aligns with the SBP's vision of creating a stable and inclusive financial ecosystem that fosters broad-based growth. Governor Ahmad also acknowledged the ADB's support for women's financial inclusion in Pakistan and its role in assisting the SBP in adopting and implementing the Women Entrepreneurs Finance Code.
Deputy Governor SBP Saleemullah highlighted the various initiatives the SBP has introduced to promote women's financial inclusion, including the National Financial Inclusion Strategy (NFIS) and the Banking on Equality Policy (BOE). The BOE aims to integrate a gender perspective into banks' policies, products, and rollout strategies.
Christine Engstrom, Senior Director Finance at the ADB, and Wendy Teleki, Head of the WE Finance Initiative at the World Bank, expressed their satisfaction with the SBP's commitment to the code as a global signatory.
The launch event also included panel discussions featuring policymakers, financial sector leaders, entrepreneurs, and civil society representatives. These discussions focused on the challenges facing women entrepreneurs, shared success stories, and explored collaborative strategies to promote women's entrepreneurship in Pakistan.
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