ICMA Backs SBP’s Rate Decision as Pakistan Navigates Global Economic Uncertainty
The institute says keeping the policy rate unchanged at 11.5% is a balanced approach to controlling inflation while safeguarding macroeconomic stability.
ICMA releases its latest review supporting the SBP’s decision to maintain the policy rate at 11.5%.
Karachi: The ICMA Review has endorsed the State Bank of Pakistan’s decision to keep the benchmark policy rate unchanged at 11.5%, describing the move as a measured response to persistent inflationary pressures and growing global economic uncertainty.
Issued by the Institute of Cost and Management Accountants of Pakistan (ICMA) through its Research and Publications Department, the latest Monetary Policy Statement Review (Issue #25) examines the central bank’s monetary policy announcement made on July 27, 2026.
The report notes that although Pakistan’s headline inflation has eased to 11.1%, it remains above the country’s medium-term target. ICMA said global commodity price volatility, geopolitical tensions, and domestic economic uncertainties continue to pose significant risks to Pakistan’s economic outlook.
ICMA Review Supports Cautious Monetary Policy
More than 100 words into the report, the ICMA Review concludes that maintaining the policy rate at 11.5% represents a prudent strategy that helps anchor inflation expectations while preserving macroeconomic stability. The institute cautioned that lowering interest rates too early could reignite inflationary pressures and reverse recent gains in price stability.
According to the review, Pakistan continues to maintain one of the highest policy rates among comparable regional economies due to domestic inflation challenges and external vulnerabilities rather than a divergence in monetary policy direction.
Data-Driven Approach Recommended
ICMA emphasized that future monetary policy decisions should remain data-driven and supported by coordinated fiscal measures. Instead of broad-based interest rate cuts, the institute recommended targeted financing schemes to assist key sectors while maintaining monetary discipline.
The report also called for stronger coordination between fiscal and monetary authorities to support sustainable economic growth without compromising inflation control.
Structural Reforms Remain Essential
The review stressed that long-term economic stability depends on structural reforms beyond monetary policy. It highlighted taxation reforms, lower energy costs, and improved food supply management as critical measures to reduce inflationary pressures and lessen dependence on high interest rates.
ICMA argued that addressing these structural challenges would provide more durable support for businesses while strengthening Pakistan’s overall economic resilience.
Industry Perspectives Highlight Business Challenges
While acknowledging broad support for the central bank’s cautious approach, the publication also recognized the financial challenges that elevated borrowing costs continue to pose for businesses.
By incorporating views from economists and industry stakeholders, the review aims to contribute to informed public discussion on monetary policy and its impact on Pakistan’s economic stability, investment climate, and long-term growth prospects.
