ISLAMABAD: S&P Global Market Intelligence stated that the State Bank of Pakistan (SBP) maintained policy rate as domestic momentum builds and inflation risks persist while roll-over heavy debt repayments to stay manageable as reserves slowly increase.
This analysis was produced by S&P Global Market Intelligence, not S&P Global Ratings, which is a separately managed division of S&P Global.
It further stated that the SBP now projects real GDP growth in the range of 3.75–4.75% in fiscal year 2026, reflecting stronger-than-anticipated momentum in commodity-producing sectors and spillovers to services. This momentum is expected to extend into fiscal year 2027, aided by earlier monetary easing and ongoing macroeconomic stability. S&P Global Market Intelligence also projects real GDP to expand 3.5% in fiscal year 2026, before strengthening to 4.4% in fiscal year 2027.
On the external front, the SBP expects the current account deficit to remain within 0–1 percent of GDP in fiscal year 2026. With continued remittance inflows and planned official financing, foreign exchange reserves are projected to surpass $18.0 billion by end-June 2026 and rise further in fiscal year 2027, approaching the benchmark of three months of import cover.
S&P Global Market Intelligence projects a current account deficit of 0.5 percent and 1.3 percent of GDP, respectively, in calendar years 2026 and 2027. Risks weigh on the downside, owing to elevated global tariff uncertainty, volatile commodity prices, and geopolitical fragmentation.
SBP expects inflation to stabilize within the 5–7 percent target range over the next two years, after temporarily exceeding the upper bound for a few months during calendar year 2026. S&P Global Market intelligence projects inflation to come at 5.1% in 2026 before slightly inching upwards to 5.6 percent in 2027. However, risks to the inflation outlook are tilted to the upside, linked to volatility in global commodities and domestic wheat prices, possible adjustments in administered energy tariffs, and a stronger-than-assumed pickup in domestic demand.
Khurram Schehzad, Adviser to Finance Minister said that overall, S&P’s projections broadly align with SBP’s outlook, with slight differences on growth and the current account but a shared assessment of easing inflation and gradual economic improvement.
S&P Global Market Intelligence (S&P) has released its latest macroeconomic forecast for Pakistan, offering an updated view on inflation, the current account, and growth, which can be compared with SBP’s latest projections. He said S&P’s point forecasts (5.1%–5.6%) sit within SBP’s 5%–7% band, and imply stable-to-slightly higher inflation from 2026 to 2027.
Copyright Business Recorder, 2026
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