Pakistan's inflation fell from over 30% to target range, SBP governor says

Pakistan's central bank governor has put a number on the country's turnaround: inflation that once ran above 30% has come back inside the medium-term target range, Jameel Ahmad said, crediting a positive forward-looking real policy rate for the descent.

Speaking at the annual convocation of the Institute of Cost and Management Accountants of Pakistan, the State Bank of Pakistan governor said the economy has come a long way since 2022 despite severe global and regional shocks. Real GDP growth has climbed from a contraction in FY23 to 3.7% in FY26, and he expects it to rise further this fiscal year, while the current account deficit is projected to stay within 0-1% of GDP.

Ahmad said the policy rate was raised and held for almost a year, alongside temporary measures to manage non-debt foreign exchange outflows, to restore stability and avert a deeper external financing and debt crisis. He argued that timely, decisive action, fiscal discipline and evidence-based policymaking underpinned the recovery, and that lasting progress cannot come from short-term fixes at the expense of long-term stability.

The governor said rating agencies, multilateral partners and foreign investors are recognising the improved fundamentals, and that risk-based supervision has sharpened the identification of financial stability risks even with policy rates elevated. Inflation has risen since its spell near target, he noted, but is projected to ease gradually back towards the range.

Turning to the graduates, Ahmad urged them to let evidence guide their judgement and professional ethics define their conduct, and stressed the accounting and finance profession's role in strengthening institutions, promoting accountability and ensuring informed decision-making.