SBP expects Pakistan's GDP growth to exceed 3.7% this fiscal year

State Bank of Pakistan (SBP) Governor Jameel Ahmad said Friday that Pakistan’s economy continues to recover from the severe economic pressures experienced in 2023, with macroeconomic indicators pointing to sustained stability and revised GDP growth for fiscal year 2025-26 expected to exceed 3.7%.

Speaking at a press conference, Ahmad said the central bank expects economic growth to improve further during the current fiscal year, supported by a stronger external sector, industrial expansion and easing regional uncertainties.

SBP expands media engagement

The governor announced that the SBP will increase its engagement with the media during the new fiscal year.

He said the number of monetary policy press conferences has been increased from two to four annually, making them a quarterly feature under the monetary policy calendar. The central bank is also organizing workshops and training sessions for economic and business journalists to improve understanding of monetary policy and broader economic developments.

Economy recovering from 2023 crisis

Ahmad said Pakistan faced severe economic challenges in 2023, but conditions improved during 2024 and 2025.

He said macroeconomic indicators now reflect greater stability and the economy is gradually strengthening.

According to the governor, GDP growth stood at 3.4% in the last fiscal year, while the SBP estimates the revised growth rate will exceed 3.7%. He added that the economy is expected to expand by about 3.75% during the current fiscal year.

The governor noted that the SBP had originally projected GDP growth of more than 4%, but several factors slowed the pace of expansion. Despite this, he said the overall performance remained encouraging.

He added that the economy grew by about 4% in the third quarter of the previous fiscal year.

Industry and services offset weak farm performance

Ahmad said agricultural growth remained below expectations, weighing on overall GDP growth.

However, he noted that large-scale manufacturing grew by more than 6% during the fiscal year, with output increasing by more than 10% in several months. He added that the services sector also continued to expand, supporting overall economic activity.

Inflation remains within annual target

The SBP governor said inflation accelerated to about 11% in June, largely due to higher petroleum prices and increased transportation costs.

However, average inflation for the fiscal year remained within the government's target range of 5% to 7%.

He expressed confidence that inflationary pressures would ease following the start of the new fiscal year.

External sector strengthens

Highlighting improvements in Pakistan’s external accounts, Ahmad said the country recorded a current account deficit of approximately USD 17.5 billion in 2022, but the external balance has improved steadily since then.

He said Pakistan is currently running a current account surplus, reflecting a significant turnaround in the country’s external position.

The governor added that the country’s foreign exchange reserves reached USD 18.4 billion by the end of the last fiscal year, while imports continue without restrictions.

New fiscal year outlook

Ahmad said the State Bank will present its detailed macroeconomic projections and outlook for fiscal year 2026-27 at its next monetary policy meeting.

He said improved regional conditions are also expected to support economic activity, adding that the central bank expects growth in the current fiscal year to surpass that of the previous year while maintaining macroeconomic stability.