KARACHI: State Bank of Pakistan Governor Jameel Ahmed announced that the interest rate will remain unchanged for the next two months.
During a press conference in Karachi, he outlined the country’s economic outlook, highlighting key projections for inflation, exports, GDP growth, and the agricultural sector.
Ahmed explained that maintaining the current interest rate was aimed at ensuring economic stability amid global financial challenges. While inflation is expected to remain steady at 7.4%, it may rise above this level in the coming months. “Inflation could exceed 7% in the near future, but we remain vigilant and prepared for any necessary adjustments,” said Ahmed.
Despite a projected 6% drop in exports this year, Ahmed pointed to growth in agriculture, driven by better crop production and minimal flood damage. “Agricultural growth will improve this year, boosting the economy and rural employment,” he noted. Additionally, remittance inflows have shown positive trends, providing a cushion against export losses.
Ahmed forecasted Pakistan’s GDP growth at 3.75% to 4.75% for the current year, reflecting resilience in key sectors despite external challenges. “The overall outlook remains stable, supported by industry and agriculture,” he added.
Foreign exchange reserves have risen to over $16 billion and are expected to exceed $18 billion by June 2026. The central bank also reduced the cash reserve requirement for commercial banks from 6% to 5%, easing liquidity. “We expect reserves to exceed $18 billion by June, further supporting the banking system,” said Ahmed.
Though Pakistan faces external payment obligations, Ahmed reassured that these are manageable, with total external payments dropping to $25.7 billion, including a $7 billion rollover.
In conclusion, while challenges such as slower export growth and inflation persist, Pakistan’s economy shows resilience in agriculture, industry, and remittances. The central bank’s policies, including maintaining the interest rate and increasing reserves, are expected to help maintain stability in the coming months.
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