Central bank wants to shift Pakistan to export based economy: SBP governor

• 'A very key shift that has to occur in our thinking is to shift ourselves from being an inward oriented economy to an outward-oriented economy,' says Baqir.
• SBP governor says that following the measures prescribed in the program can pave way for much needed ‘sustainable growth’.

The State Bank of Pakistan (SBP) wants to shift Pakistan to an export based economy in order to achieve sustainable growth, said the central bank's governor Reza Baqir. 

“Countries that have sustainably raised their living standards, emerging markets particularly, have relied on exports,” said Baqir, in an interview to Bloomberg. “In our view, a very key shift that has to occur in our thinking is to shift ourselves from being an inward-oriented economy to an outward-oriented economy,” he said.

Outward and inward-oriented growth strategies are two different tactics for developing economic growth within a nation, states enotes. An outward-oriented growth strategy focuses on external growth—developing trade and international business dealing.

Speaking about the ongoing International Monetary Fund (IMF) program, the central bank chief expressed optimism saying that following the measures prescribed in the program could pave way for much needed ‘sustainable growth.’

“The measures that are in this program are all measures that we think are going to lay the foundations for sustainable growth and to end the boom-and-bust cycles that have historically plagued us,” said Baqir. “The start is encouraging, it’s very good but we have to keep our eye on the goal post.”

The governor said that the country’s economy has shown signs of improvement, and said that the focus is now on adopting export-focused strategies.

“People sometimes take things for granted but you know, all we need to do is to look back four, five months and the sentiment was very different,” said Baqir. “The fact that the sentiment has turned around is, for us, an important part of the stabilization.”

Earlier, Moody's Investor Services changed Pakistan's outlook from ‘Negative’ to ‘Stable,’ a development welcomed by Governor SBP . “This positive development reflects the recognition of tough decisions taken by the economic policymakers over recent months including the step devaluations of the exchange rate that culminated in the change in the exchange rate regime to a market based system since May 2019,” he said in a statement.