Shamshad Akhtar interview: Pakistan’s central bank head takes an optimistic view

Sudip Roy

April 04, 2008

Even given its tumultuous history, the past few months have been especially volatile in Pakistan, highlighted by the assassination of Benazir Bhutto. From a financial perspective, the country faces several problems, in particular rising inflation. Shamshad Akhtar, governor of the State Bank of Pakistan, tells Sudip Roy why, despite this, she is confident about the nation’s medium-term prospects.

"Pakistan has a tremendous amount of economic potential and has shown a tremendous amount of resilience over the past few years"
Shamshad Akhtar, State Bank of Pakistan

Pakistan is a country of contradictions. On the one hand, economic growth is relatively healthy and the stock market is hitting record highs. On the other, inflation is a worry, as is a growing current account deficit. Which is the more accurate barometer of Pakistan’s medium-term prospects?

Pakistan has a tremendous amount of economic potential and has shown a tremendous amount of resilience over the past few years. The outcome in 2007 was, by all yardsticks, a decent one. What is complicating the situation, aside from our domestic politics, are inflationary pressures emerging from the food sector and higher oil prices. So there are a few problems.

Given these issues, what is the single-biggest financial problem facing the country?