State Bank of Pakistan (SBP) Governor Jameel Ahmed projected that Pakistan’s economy could grow up to 4.75 percent in FY26, exceeding the International Monetary Fund’s recent estimates, Reuters reported.
The central bank revised its growth forecast to a range of 3.75–4.75 percent, an upward adjustment of 0.5 percentage points from its previous projection, despite challenges such as declining exports and a significant trade deficit in the first half of the fiscal year.
Governor Jameel highlighted that all high-frequency economic indicators, along with 6 percent growth in large-scale manufacturing, suggest robust domestic demand. Agricultural production has also remained resilient despite last year’s floods, providing additional support to the economy.
Financial conditions have eased following a cumulative 1,150-basis-point cut in the policy rate since June 2024, which has helped stimulate growth while maintaining price stability.
Exports, Remittances, and Forex Outlook
Exports have slowed due to low global commodity prices and border disruptions. However, strong remittance inflows continue to provide a cushion to the economy.
The governor indicated that dollar inflows around the Eid festival are expected to keep the current account deficit within 0–1 percent of GDP, supporting the country’s foreign exchange reserves and stabilizing the PKR.
Analysts view the SBP’s upgraded forecast as a sign that Pakistan’s economy is gradually recovering, driven by domestic consumption, industrial output, and external remittances. Policy easing and improved liquidity conditions are expected to sustain growth momentum in the coming months.
