Governor SBP – (Web Desk) – State Bank of Pakistan Governor Jameel Ahmad believes the country’s economy could grow by up to 4.75% this fiscal year, challenging a recent downgrade by the International Monetary Fund. In written comments to Reuters, he said the recovery is stronger and more widespread than export figures alone indicate.
The central bank raised its FY26 growth outlook to between 3.75% and 4.75% at its January meeting, an increase of 0.5 percentage points, despite weaker exports in the first half of the year and a wider trade gap.
Ahmad noted that differences in forecasts are common and largely due to timing, including the IMF’s use of flood-related assessments in its latest projections. He added that recent data shows steady improvement across all major sectors, with agriculture remaining resilient after floods and even outperforming its targets.
He added that financial conditions had eased significantly following a cumulative 1,150‑basis‑point cut in the policy rate since June 2024, and that the full impact was still feeding through. This, he said, was supporting growth while preserving price and economic stability.
The central bank last month held its benchmark rate at 10.5%, defying expectations for a cut.
The divergence with the IMF comes at a delicate moment for Pakistan, which is emerging from a balance-of-payments crisis under a $7 billion IMF programme.
Pakistan’s previous growth spurts have often led to currency pressure and a decline in foreign exchange reserves, making the sustainability of the current rebound a key question for investors.
Ahmad said high-frequency indicators and 6% growth in large-scale manufacturing in July-November point to strengthening demand, while agriculture has remained resilient despite last year’s floods, he said.
While exports declined in the first half of the fiscal year, Ahmad said the fall reflected low global prices and border disruptions rather than softer activity.
He said the current account deficit should stay within 0–1% of GDP, as strong remittances offset the wider trade gap and lift reserves above programme targets, with further gains expected due to Eid festival-related inflows.
“Additionally, if the government decided to tap global capital markets for any debt issuance, then that would be on the upside of our current assessment,” he said.
Pakistan plans to issue panda bonds, a yuan-denominated debt sold in China’s domestic market around the upcoming Lunar New Year, as part of efforts to diversify external financing and broaden its investor base.
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He said the central bank has been consistently purchasing dollars in the interbank market to strengthen foreign exchange buffers, with data published regularly.
He said that while economic stability has improved, structural reforms remain key to sustaining stronger growth and improving productivity.
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