SBP governor briefs global investors on Pakistan's economic outlook in Bangkok

State Bank of Pakistan (SBP) Governor Jameel Ahmad highlighted Pakistan's improving macroeconomic conditions and outlook during high-level meetings with foreign investors from leading global institutions on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand, from October 12 to 17.

The meetings were organized and attended by senior executives from JP Morgan, Citibank, Jefferies, Deutsche Bank, Barclays, Bank of America, MSCI, Standard Chartered and Mitsubishi UFJ Financial Group. The governor also held meetings with bilateral and multilateral partners, other central banks and global credit rating agencies.

Ahmad told participants that sustained and prudent macroeconomic policies and structural reforms have made Pakistan's economy more resilient to domestic and external shocks. Inflation has declined sharply from elevated levels in FY23 to almost within the target range in FY26, despite a significant oil price shock.

Real GDP growth, after contracting in FY23, has been rising gradually, reaching 3.7% in FY26, and is projected to range between 3.5% and 4.5% in FY27.

Reserves and external position

SBP's foreign exchange buffers have strengthened considerably, with official reserves recovering from less than USD 3 billion in February 2023 to USD 21.5 billion by October 9, 2026. SBP's forward liabilities have also fallen from over USD 5.7 billion to less than USD 1.0 billion.

These improvements have been largely driven by SBP's FX purchases, while the external debt stock has risen only marginally over the last three years. The FX purchases were facilitated by an almost balanced current account in FY26.

Regulatory reforms by SBP, especially for exchange companies and to encourage remittances through formal channels, have improved interbank FX liquidity. FX purchases are expected to continue, with the current account deficit projected to remain contained within 0% to 1% of GDP in FY27.

Fiscal position and IMF program

Pakistan's fiscal position has also strengthened, with the primary fiscal balance posting a third consecutive annual surplus in FY26. As a result, the public debt-to-GDP ratio has been on a downward trajectory.

The governor also informed participants that a staff-level agreement has been reached with the IMF for the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) reviews. He noted that continued implementation of the reform agenda has improved investor confidence, led to upgrades in the country's sovereign credit ratings and facilitated Pakistan's access to global capital markets despite a challenging global environment.

Ahmad emphasized that Pakistan's economic fundamentals remain strong, supported by a prudent policy mix that has cushioned the impact of multiple shocks over the last three years. While ongoing geopolitical developments pose challenges, he said Pakistan's economy is in a significantly better position to withstand this shock than during previous periods of external stress.

He also reaffirmed SBP's commitment to safeguarding hard-earned macroeconomic stability, strengthening external buffers and advancing structural reforms for sustainable economic growth.