S&P’s projections for Pakistan ‘broadly align’ with SBP’s outlook, says Khurram Schehzad

Khurram Schehzad, Adviser to the Finance Minister, on Tuesday said that S&P Global Market Intelligence (S&P )’s latest macroeconomic forecasts for Pakistan broadly align with projections from the State Bank of Pakistan (SBP).

In a statement, Schehzad shared that S&P projects inflation at 5.1% in 2026, rising slightly to 5.6% in 2027, indicating a “slight increase”. The SBP, meanwhile, has forecast a range of 5%–7% over the next two years.

“S&P’s point forecasts, i.e. 5.1–5.6%, sit within SBP’s 5–7% band, and imply stable-to-slightly higher inflation from 2026 to 2027,” said Schehzad.

On the external front, S&P anticipates Pakistan’s current account deficit at 0.5% of GDP in 2026, expected to increase to 1.3% in 2027.

Meanwhile, the SBP projects that the FY26 current account deficit is expected to remain between 0% and 1% of GDP. “For FY26, S&P’s 0.5% deficit aligns with SBP’s 0–1% range.  S&P’s other-year projection, i.e. 1.3% is slightly above SBP’s FY26 band,” Schehzad commented.

Moreover, S&P expects Pakistan’s real GDP growth to be 3.5% in FY26, strengthening to 4.4% in FY27. In comparison, the SBP projects 3.75%–4.75% growth for FY26.

“S&P expects growth to pick up in FY27 to 4.4%, which is within SBP’s FY26 range.

“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,” said Schehzad.

On Monday, SBP Governor Jameel Ahmed presented an upbeat outlook for the economy, revising the GDP growth forecast upward, ranging 3.75-4.75% for FY26, and indicated that SBP’s foreign exchange reserves are expected to reach an all-time high of $20.2 billion by the end of December 2026.

Addressing a press conference following the Monetary Policy Committee (MPC), Ahmed informed that Pakistan’s real GDP grew by 3.7% y/y in Q1 of FY26 as compared to 1.6% in the corresponding period last year (FY25), indicating a notable pickup in economic activity, mainly led by the industry and agriculture sectors.