State Bank of Pakistan (SBP) Governor Jameel Ahmad has identified Pakistan’s low saving rate as a major economic hurdle. Low domestic savings rate is one of the most pressing structural challenges for the economy and inadequate savings continue to constrain investment and long-term growth, said the Governor.
Speaking at a policy forum on Monday, the SBP chief noted that Pakistan’s savings-to-GDP ratio lags behind regional peers, leaving the country heavily dependent on external borrowing and foreign inflows to finance development. He stressed that raising domestic savings is crucial for reducing vulnerabilities and building resilience in the face of global economic shocks.
Ahmad said boosting financial inclusion, encouraging small savings, and developing a culture of long-term investment are vital steps to address the gap. He added that reforms in pension systems, insurance markets, and capital markets could help channel household savings into productive sectors of the economy.
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The governor highlighted that low savings not only limit investment capacity but also exacerbate fiscal and current account pressures, forcing the government to rely on high-cost financing. “Without strengthening domestic resource mobilization, achieving sustainable growth will remain difficult,” he remarked.
Analysts say Pakistan’s savings rate has averaged below 15 percent of GDP for years, compared to over 30 percent in some regional economies. Experts believe that policy incentives, tax reforms, and attractive savings instruments are needed to reverse the trend.
The SBP governor reaffirmed the central bank’s commitment to support financial sector reforms, promote digital banking solutions, and enhance public awareness to encourage a stronger savings culture in the country.
