‘Growth model no longer good enough’: Pak central bank chief’s dire warning; calls it ‘inflection point’

State Bank of Pakistan (SBP) governor Jameel Ahmad has warned that the country’s existing economic growth model “can no longer sustain” its population of 250 million (25 crore).Also Read | ‘Persistent, corrosive’: IMF blames corruption for Pakistan’s economic crisis; cites policy for elites“Our business cycles are shortening and as such, our current growth model simply cannot sustain a country of over 250 million people,” he remarked at the Pakistan Business Council’s Dialogue on the Economy on Wednesday, according to The Express Tribune. Ahmad, who has led the SBP since August 2022, noted that Pakistan’s growth trajectory had been “steadily weakening for decades” — slipping from an average of 3.9 per cent over the past 30 years, to 3.5 per cent in the last two decades, and further down to 3.4 per cent over the past five years.He added that Pakistan had been caught in a “prolonged phase of stabilisation,” during which, he said, citizens and businesses were burdened by steep taxes, high energy costs and unchecked government spending. He urged policymakers and private-sector leaders to move away from short-term fixes and adopt a long-term outlook.Calling the moment an “inflection point,” Ahmad pushed for a shift towards inclusive, sustainable growth, advocating structural reforms and urging businesses to expand their competitiveness by integrating into global value chains, modernising production, and avoiding “shortcuts” for quick profits.Ahmad also highlighted that Pakistan’s external debt nearly doubled from $55 billion to $100 billion between 2015 and 2022 without a corresponding rise in reserves. Since 2022, however, public external debt has remained broadly unchanged while SBP’s reserves have climbed from $2.9 billion to $14.5 billion, aided by $8.4 billion in market purchases during the last fiscal year.His remarks came a day after Planning Minister Ahsan Iqbal blamed the International Monetary Fund (IMF) for Pakistan’s highest unemployment rate in 21 years. Unemployment has risen to 7.1 per cent, while the World Bank estimates 44.7 per cent of Pakistanis now live below the poverty line.(With ANI inputs)