KARACHI – After navigating one of the most turbulent periods in recent economic history, Pakistan’s economy appears to be regaining its footing, with inflation at record lows, foreign reserves at a three-year high, and a current account surplus for the first time in over a decade all achieved without taking on new foreign debt.
Addressing a flag-hoisting ceremony on Independence Day, State Bank of Pakistan (SBP) Governor Jameel Ahmad reflected on the country’s journey from crisis to cautious recovery. He noted that in May 2023, inflation had peaked at a staggering 38%, while foreign exchange reserves had plunged to a precarious $4.4 billion. “The past few years tested our resilience like never before,” he said, “but we are now firmly on a path towards economic stability and sustainable growth.”
According to Ahmad, the turnaround is the result of decisive monetary tightening, structural reforms, and stronger external inflows. Over the past year, inflation has dropped sharply from 11.8% in May 2024 to just 3.2% by June 2025, the lowest level in Pakistan’s recorded history.
With inflationary pressures easing, the SBP has gradually cut its policy rate in seven steps from 22% to 11% since June 2024. “Our monetary policy will continue to protect the hard-earned gains in price stability, ensuring inflation stays within the 5–7% range,” Ahmad said. “This stability will open new doors for economic and business growth.”
On the external front, Pakistan’s reserves have surged from $4.4 billion at the end of FY23 to $14.5 billion by June 2025, almost tripling in two years. Ahmad stressed that this improvement was achieved without any increase in external borrowing. The $2.1 billion current account surplus the first in 14 years and record remittances of $38.3 billion from overseas Pakistanis were key contributors. The positive momentum has prompted international credit rating agencies to upgrade Pakistan’s outlook, paving the way for greater foreign investment.
The governor also outlined the SBP’s push towards greater digital and financial inclusion. He announced that Raast, Pakistan’s instant payment system, will now operate as an independent subsidiary to expand its services and encourage digital payments. The central bank has also rolled out modernised payment infrastructure and introduced a framework for remote account opening, eliminating the need to visit bank branches a move expected to particularly benefit women and underserved communities.
“The SBP’s goal is not just to stabilise the economy but to make financial services accessible, secure, and efficient for every citizen,” Ahmad said, emphasising that innovation will remain central to the bank’s long-term strategy.
