ISLAMABAD: Pakistan’s central bank is expected to deliver a sixth consecutive policy rate cut this month, a poll found on Tuesday, ahead of a meeting of the bank’s Monetary Policy Committee (MPC) on Jan. 27.
The State Bank of Pakistan cut its key policy rate by 200 basis points to 13 percent on Dec. 16. This was the fifth straight reduction since June as Pakistan keeps up efforts to revive a sluggish economy with inflation easing.
The move made last year’s cuts one of the most aggressive among emerging market central banks in the current easing cycle. Cumulatively, the SBP cut rates by 900 basis points in the last year.
In a poll conducted by Karachi-based Topline Securities, 61 percent of the participants expected that the central bank will announce a rate cut of 100 basis points.
“Participants are expecting rate cut due to high real rates of 950bps in Jan. 2025, compared to historic average of 200-300bps, despite 900bps cut in total interest rates in last five consecutive meetings since Jun 2024,” Topline Securities said on Tuesday.
“We also hold the view that the SBP will announce a rate cut of 100bps, taking total cut to 1000bps. This will be 6th consecutive cut of this cycle.”
In Dec. the MPC assessed that its approach of measured policy rate cuts was keeping inflationary and external account pressures in check, while supporting economic growth on a sustainable basis.
The central bank noted that it expected inflation to average “substantially below” its earlier forecast range of 11.5 percent to 13.5 percent in 2025.
On the inflation side, 56 percent of the participants expected inflation to remain below 8 percent this fiscal year (July 2024-June 2025), according to Topline Securities.
The South Asian country is navigating a challenging economic recovery path and has been buttressed by a $7 billion facility from the International Monetary Fund (IMF) in September.
The central bank has said that “considerable efforts and additional measures” will be required for Pakistan to meet its annual revenue target, a key focus of the IMF agreement.
POLL: Pakistan central bank set to deliver sixth consecutive rate cut to revive economy
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POLL: Pakistan central bank set to deliver sixth consecutive rate cut to revive economy
- On the inflation side, 56 percent participants of the poll expect inflation to remain below 8 percent this fiscal year
- Pakistan requires ‘considerable efforts, additional measures’ to meet revenue target, central bank says
World Bank approves $400 million to expand water, sanitation services in Pakistan’s Punjab
- Project aims to improve access for 4.5 million people and curb waterborne diseases
- Program to prioritize women’s participation and climate-resilient urban infrastructure
ISLAMABAD: The World Bank this week approved $400 million for a new project to expand access to safe water, sanitation and hygiene services for around 4.5 million people in Pakistan’s most populous Punjab province, aiming to curb waterborne diseases and reduce long-term public health costs.
The project, known as the Punjab Inclusive Cities Program (PICP), is the second phase of the World Bank-supported Pakistan Urban Water, Sanitation and Hygiene Services Multiphase Programmatic Approach. It will focus on rehabilitating water supply networks, sewerage systems and wastewater treatment plants, while expanding stormwater drainage infrastructure across 16 secondary cities in Punjab.
Punjab faces persistent challenges in providing safe drinking water and adequate sanitation, with many urban households relying on contaminated sources. Weak infrastructure and limited hygiene services contribute to high rates of waterborne diseases such as diarrhea, typhoid and hepatitis, which disproportionately affect children and low-income communities.
“Reducing child stunting is essential for Pakistan’s future. Through the Punjab Inclusive Cities Program, we are investing in safe water, sanitation, and hygiene services to break the cycle of malnutrition and disease that holds back so many children from reaching their full potential,” the World Bank quoted its Country Director for Pakistan, Bolormaa Amgaabazar, as saying in a statement.
“In collaboration with the Punjab Government, the program represents a significant step forward in improving urban infrastructure and strengthening local institutions, thereby laying the foundation for healthier communities and a more prosperous Pakistan.”
Child stunting, a form of chronic malnutrition that leaves children too short for their age, is often linked to repeated infections, poor sanitation and unsafe drinking water, and remains a major public health concern in Pakistan.
Beyond water and sanitation, the project will also support solid waste management systems to improve sanitary waste disposal, extending services to an additional two million people in Punjab’s urban areas. The program will strengthen the capacity of local governments, including efforts to improve revenue generation and long-term service sustainability.
“The program complements infrastructure investments with capacity building and revenue generation, helping to ensure that service delivery is well sustained,” the statement quoted Amena Raja, Senior Urban Specialist at the World Bank, as saying.
“It will also help Punjab’s cities better withstand floods and droughts, ensuring urban development is both environmentally responsible and resilient to climate change.”
The program includes a gender-focused component, prioritizing the hiring of women in decision-making roles, establishing gender-compliant service desks and supporting skills development. It also aims to mobilize private capital to support water and sanitation services in Punjab’s secondary cities.
Pakistan has been a member of the World Bank since 1950 and has received more than $48 billion in assistance since. The Bank’s current portfolio in the country comprises 54 projects with total commitments of $15.7 billion, while its private-sector arm, the International Finance Corporation, has invested about $13 billion since 1956.
Earlier this year, Pakistan and the World Bank signed a first-of-its-kind agreement for a plan to focus $20 billion in lending to the cash-strapped nation over the coming decade on development issues like the impact of climate change as well as boosting private-sector growth.
