KARACHI:Governor State Bank of Pakistan (SBP) Jameel Ahmad on Wednesday called upon the local trade and businesses to invest in people to attain sustainable and long-term inclusive economic growth and social prosperity across the country.
Addressing a two-day event titled ” Dialogue on the Economy”, organized by the Pakistan Business Council (PBC), the governor said that economic growth is impossible without an adaptable and skilled workforce, especially at a time when Pakistan’s young population offers a demographic dividend that gives us an edge over many other countries.
Our firms must invest in upskilling their employees in digital literacy, technical expertise and managerial capabilities, aligning them with staging market needs, he said adding that the private sector should also pursue partnerships and joint ventures abroad to facilitate technology transfer, knowledge sharing and improving productivity and competitiveness.
He asked the businesses, chambers of commerce and trade associations to collaborate, adding that by co-investing in vocational training, innovation hubs, and supply chain linkages, the businesses can achieve collective productivity gains.
The SBP Governor also asked for exploring beyond traditional bank financing and make greater use of domestic and global capital markets to meet the growing financing needs, adding that by tapping equity and debt markets, both at home and abroad, businesses can diversify their funding sources, raise longer-term capital and reduce their reliance on the domestic banking system, he remarked.
He said that the monetary policy has become more forward-looking over the last few years, adding that since monetary policy operates with long lags, by adopting a forward-looking approach we allow transmission to work more effectively.
The Monetary Policy Committee now regularly reviews projections for the next eight quarters rather than focusing only on current data and near-term projections, he said adding that this shift reflects both enhanced analytical capacity and greater confidence in the in-house forecasting models.
He informed that two years ago, the SBP had projected inflation to fall back within the target range of five to seven percent in the periods ahead, adding that there was widespread skepticism. Not only has inflation declined as per our projection, but it is expected to remain within the target band over the medium term.
Similarly, more recently, our early assessments of a pickup in economic activity from January 2025 onwards were questioned, yet this momentum is now evident in official data and national accounts, he added.
Jameel Ahmad said that the buildup of the external buffers has been driven by sustained foreign exchange purchases rather than the debt-heavy or short-term inflows that previously supported the gross foreign exchange reserves.
He said that between 2015 and June 2022, external public-sector debt rose from $55 billion to around $100 billion, an average increase of about $6.4 billion per year, adding that despite this additional borrowing, the SBP’s FX reserves declined over that period.
