State Bank of Pakistan (SBP) Governor Jameel Ahmed said on Tuesday that economic activity in the country is showing improvement, while inflation has significantly dropped to just 0.3 per cent, says in media reports.  The governor of the state bank made these remarks while addressing the International Islamic Economic Forum Conference at a private hotel in Karachi. SBP Governor Jameel Ahmed stated that the policy interest rate, which had once climbed to its highest level in history, now stands at 11 per cent. 

He added that the current account balance has posted a surplus of $1.90 billion, marking a major achievement for the country’s external position. In a recent statement, the SBP also reported that Pakistan’s total foreign exchange reserves stood at $15.61 billion as of the week ending May 9. Of this, reserves held by the SBP reached $10.4 billion after a $71 million increase, while reserves held by commercial banks stood at $5.21 billion. Despite the positive trends, the SBP acknowledged a year-on-year decline in Foreign Direct Investment (FDI).

In April 2025, FDI was recorded at $141 million, reflecting a 64 per cent drop compared to $395 million in April 2024. However, this was a considerable improvement over the $26 million registered in March 2025. For the first 10 months of the current fiscal year (July 2024 to April 2025), cumulative FDI reached $1.785 billion, slightly down 3 per cent from $1.837 billion during the same period last year. Nonetheless, total foreign investment surged by 16 per cent, suggesting broader investor confidence beyond direct investments.

Credit: Independent News Pakistan (INP)