The State Bank of Pakistan (SBP) is set to unveil its first monetary policy for 2025, with experts anticipating a 1% decrease in interest rates due to declining inflation. This highly anticipated announcement is expected to have a profound impact on Pakistan’s economy. Chaired by Governor Jameel Ahmad, the Monetary Policy Committee will reveal the policy details after their meeting today.
As inflation rates continue to drop, experts predict a further reduction in interest rates, which could potentially boost economic growth. Pakistan’s consumer inflation rate has slowed down to an over 6-1/2-year low of 4.1% in December, largely due to a high year-ago base. This downward trend in inflation has created a favorable environment for a rate cut.
The SBP has already cut interest rates by 1,000 basis points from an all-time high of 22% in June 2024, one of the most aggressive moves among central banks in emerging markets. With this anticipated rate cut, the SBP aims to strike a balance between controlling inflation and promoting economic growth.
Business leaders are also pushing for bolder measures, urging the SBP to bring the interest rate below 10% to support economic recovery. As the SBP announces its first monetary policy for 2025, all eyes are on the potential impact of this decision on Pakistan’s economy.
