SBP Governor Sees Broad Economic Recovery Across All Sectors

State Bank of Pakistan (SBP) Governor Jameel Ahmad expects the economy to grow by up to 4.75% this fiscal year, notwithstanding the recent downgrade by the International Monetary Fund.

Ahmad contended in written answers to Reuters that the recovery is more extensive and long-lasting than headline export statistics indicate.

Despite a decline in exports in the first half of the year and a growing trade deficit, the SBP extended its prediction for FY26 growth to 3.75-4.75% at its January meeting, which was 0.5 percentage points higher than its prior range.

According to the governor, discrepancies in forecasts were common and caused by scheduling problems, such as the IMF’s inclusion of flood-related assessments in its most recent outlook.

“All these sources and indicators, along with FY26-Q1 data, point to a broad-based recovery in all three sectors of the economy,” he stated, adding that the central bank believed that agricultural activity had remained resilient inspite of floods, and “it is even performing better than its targets.”

He continued by saying that after a combined 1,150 basis points of policy rate cuts since June 2024, financial conditions had greatly improved and that the full effect was still being felt. He said that this was maintaining pricing and economic stability while promoting growth.

Despite anticipation of a rate drop, the central bank maintained its benchmark rate at 10.5% last month.

As Pakistan emerges from a balance-of-payments problem under a $7 billion IMF program, the disagreement with the IMF occurs at a critical juncture.