Pakistan's financial system shows resilience in FY25: SBP Governor

MG News | October 17, 2025 at 02:52 PM GMT+05:00
October 17, 2025 (MLN): The country's macroeconomic landscape has witnessed a dramatic transformation during fiscal year 2025, with inflation rates dropping sharply and the financial system demonstrating exceptional resilience, according to the latest Governor's Annual Report released by the central bank.
The disinflationary trend that emerged last year has
accelerated significantly, with average National Consumer Price Index inflation
plummeting to 4.5% in FY25, down from 23.4% in FY24 and 29.2% in FY23. This
represents one of the sharpest declines in recent economic history.
The decline has been broad-based across multiple sectors.
Food inflation contributed most substantially to this drop, driven by improved
availability of food commodities in domestic markets and lower international
food prices. Energy inflation also decreased considerably, benefiting from
downward adjustments in administered energy tariffs amid softer global oil
prices.
Responding to the improved inflation outlook, the
Monetary Policy Committee reduced the policy rate by a cumulative 1,100 basis
points between June 2024 and June 2025.
However, authorities slowed the pace of monetary easing
in the second half of the fiscal year due to lingering uncertainties, including
sticky core inflation, evolving global trade tariffs, rising geopolitical
tensions, and volatility in energy prices.
This measured approach facilitated notable expansion in
private sector credit and supported gradual recovery in economic activity,
particularly during the latter part of the fiscal year.
Fiscal consolidation played a crucial role in bringing
down inflation. The fiscal deficit narrowed to a multi-year low of 5.4 percent
of GDP, while the primary surplus more than doubled to 2.4%. This fiscal
discipline complemented monetary policy efforts to achieve price stability.
In a historic achievement, the current account balance
posted a surplus for the first time in over fourteen years. Combined with
increased financial inflows following the IMF's Extended Fund Facility
programme, this enabled the central bank to conduct significant foreign
exchange purchases from the interbank market, strengthening reserves and
enhancing market stability.
The financial system remained resilient throughout FY25,
with the banking sector exhibiting stability across all major indicators. The
adoption of IFRS-9 standards since January 2024 strengthened banks' risk
management frameworks and enhanced their loss-absorption capacity. Banking
sector assets expanded to nearly 52.4 percent of GDP, up from 49.1 percent in
FY24.
Significant progress was made in advancing digital
payments infrastructure. Key developments included the establishment of Raast
Payments Pakistan (Pvt.) Ltd., the introduce of the enhanced PRISM+ settlement
system with integrated Central Securities Depository features, and the
introduction of a Regulatory Sandbox Framework for payment innovation.
Digital payment acceptance solutions were implemented
nationwide, alongside further digitization of government payments, as part of
ongoing efforts to promote a cashless economy.
The National Financial Inclusion Strategy 2024-28 was introduced
with ambitious targets to raise financial inclusion to 75% and reduce the
gender gap to 25 percent by 2028.
Initiatives such as the National Financial Education
Roadmap 2025-29 and continued implementation of the Banking on Equality policy
are driving progress.
While recognizing recent reforms in taxation, customs
tariffs, agricultural commodity market deregulation, and gradual withdrawal of
untargeted subsidies, authorities emphasize the need for steadfast
implementation of structural and governance reforms to sustain price and
financial stability.
The central bank has assured it remains vigilant in
monitoring evolving risks, including challenges from global tariff policy
shifts in 2025 and domestic flood impacts, factoring these into policy
decisions to safeguard economic stability essential for sustainable growth.
Copyright Mettis Link News
Related News
Name | Price/Vol | %Chg/NChg |
---|---|---|
KSE100 | 163,806.22 500.44M | -0.39% -638.50 |
ALLSHR | 99,845.79 1,977.49M | -0.42% -417.42 |
KSE30 | 50,123.85 153.24M | -0.68% -343.31 |
KMI30 | 238,530.50 71.49M | -0.36% -850.63 |
KMIALLSHR | 65,898.10 543.80M | -0.37% -245.35 |
BKTi | 46,380.96 92.15M | -0.49% -229.01 |
OGTi | 31,857.40 12.33M | -1.20% -387.93 |
Symbol | Bid/Ask | High/Low |
---|
Name | Last | High/Low | Chg/%Chg |
---|---|---|---|
BITCOIN FUTURES | 105,895.00 | 109,470.00 103,745.00 | -2550.00 -2.35% |
BRENT CRUDE | 60.84 | 61.11 60.14 | -0.22 -0.36% |
RICHARDS BAY COAL MONTHLY | 80.50 | 0.00 0.00 | -0.75 -0.92% |
ROTTERDAM COAL MONTHLY | 93.50 | 93.50 93.50 | 0.35 0.38% |
USD RBD PALM OLEIN | 1,085.00 | 1,085.00 1,085.00 | 0.00 0.00% |
CRUDE OIL - WTI | 56.86 | 57.09 56.15 | -0.13 -0.23% |
SUGAR #11 WORLD | 15.81 | 15.88 15.65 | 0.01 0.06% |
Chart of the Day
Latest News
Top 5 things to watch in this week
Pakistan Stock Movers
Name | Last | Chg/%Chg |
---|
Name | Last | Chg/%Chg |
---|