SAARC region hit with inflation, slow growth, poverty: SBP governor

State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Wednesday that SAARC region is confronted with multiple challenges and is facing difficult times in terms of very high inflation, slow growth, pressure on fiscal and external balances, climate changes and increased incidence of poverty.

Chairing the 43rd SAARCFINANCE Governors’ Group Meeting, he stated that the platform provided an opportunity to learn from each other’s experiences on relevant macroeconomic policies and the need to fortify regional cooperation in the face of a challenging environment, according to a SBP statement.

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He welcomed the governors of SAARC central banks and other delegates in the meeting.

After opening remarks by Ahmad, the central bank governors took stock of the macroeconomic situation in the region, progress on different initiatives under the SAARCFINANCE forum, including database, financial inclusion, collaborative studies and capacity building.

Alongside the Governors’ meeting, a session was arranged on SAARCFINANCE collaborative research studies completed during the year. In the session, SBP presented a study on the use of unconventional policy instruments by South Asian central banks, and another study was presented by Nepal Rastra Bank on the prospects of Central Bank Digital Currency (CBDC) in the SAARC region.

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On the sidelines, SBP also organised the flagship, Zahid Husain Memorial Lecture, where Dr Asim Ejaz Khwaja, from Harvard Kennedy School delivered a lecture on ‘Democratizing Lending: The Challenges and Opportunities for Financial Inclusion in Emerging Economies’.

SAARCFINANCE Governors’ Symposium

SBP also hosted the SAARCFINANCE Governors’ Symposium on the theme of ‘Climate Change and Green Financing: Initiatives & Outlook in South Asia’ on Wednesday to showcase its dedication to promoting a sustainable financial system.

During the session, Ahmad said the SBP had adopted a proactive approach to safeguard the financial sector against climate change and environmental risks.

He stated that the central bank undertook several green initiatives including green banking guidelines, environmental and social risk management (ESRM) implementation manual and financing scheme for renewable energy.

In his inaugural note, Ahmed emphasised on the importance of discussing the pressing issue of climate change in general and particularly with reference to the SAARC region.

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The governor highlighted the vulnerabilities of SAARC region to the adverse impacts of climate change and its implications on the financial system. He further remarked that globally, the financial systems are shifting towards promoting sustainability considerations.

The symposium focused on the role of financial sector in advancing climate change agenda and green financing in SAARC countries. The panelists shared their perspectives on the role of financial institutions in promoting sustainable finance and the ways in which green financing can be leveraged to advance climate change action in the region.

The symposium concluded with closing remarks by SBP Deputy Governor Sima Kamil expressing her gratitude to all the participants for their valuable contributions to the discussions.