The State Bank of Pakistan (SBP) is set to unveil the year’s first monetary policy on January 27. A meeting of the Monetary Policy Committee (MPC) has been scheduled for Monday.

In the meeting, key economic indicators will be reviewed to determine adjustments in the base interest rate.

The SBP governor will announce the committee's decision at a press conference later that day. Analysts predict a potential 1% cut in the policy rate, citing a slowdown in inflation as the primary factor influencing the decision.

Currently, the base interest rate stands at 13%, following a series of adjustments aimed at stabilizing the economy in previous quarters.

A reduction would align with Prime Minister Shehbaz Sharif’s recent statement hinting at further easing of interest rates to support economic recovery and spur growth.

Also Read: Pakistan's economic growth to exceed 3% in FY24-25: SBP chief

On Thursday, SBP Governor Jameel Ahmad announced that Pakistan’s economic growth will surpass 3% in the current fiscal year, with projections indicating further acceleration in the coming year.

Speaking at a press conference on Thursday, the central bank head stressed the importance of maintaining stable and gradual growth to avoid future balance of payments issues.

He noted that while Pakistan’s economic growth has averaged 3.5% over the last decade, the country occasionally experiences significant leaps in growth, followed by challenges in the subsequent years.

"The path to stable growth lies in gradual and consistent development," he said, highlighting that the SBP would focus on managing inflation and external account challenges.