State Bank of Pakistan (SBP) Governor Jameel Ahmad expects Pakistan’s economy to grow up to 4.75% in fiscal year 2026, surpassing the IMF’s recent forecast. Ahmad argued that the recovery is broader and more durable than headline export data suggest. His outlook contrasts with the IMF’s downgrade, which incorporated flood-related assessments.
The SBP raised its FY26 growth forecast to 3.75–4.75%, half a percentage point higher than its previous range. Ahmad said high-frequency indicators, strong manufacturing growth, and resilient agriculture point to a broad-based economic rebound. He highlighted that floods did not derail agricultural performance and that activity exceeded SBP targets.
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Financial conditions have eased significantly following a cumulative 1,150-basis-point policy rate cut since June 2024. Ahmad noted that these measures are supporting growth while maintaining price and economic stability. Last month, the SBP held its benchmark rate at 10.5%, defying expectations for further cuts.
Exports have declined due to lower global prices and border disruptions, but Ahmad said strong remittances are cushioning the trade deficit and keeping the current account deficit around 1% of GDP. He also noted that Pakistan plans panda bond issuance in China to diversify external financing and broaden its investor base.
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Ahmad emphasized that while economic stability has improved, structural reforms remain critical to sustaining growth and enhancing productivity. He expressed confidence that broad-based recovery across agriculture, manufacturing, and services sectors will strengthen Pakistan’s macroeconomic outlook.