Pakistan economy to remain in stabilisation phase over next two years: SBP governor

State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Friday the country’s economy would continue to remain in the recovery and stabilisation phase over the next two years, instead of attempting to achieve high growth that would be unsustainable under the provided conditions.

Briefing media on the domestic economy and the outlook, the central bank chief said policies and actions implemented by the government and the SBP would determine whether the current International Monetary Fund (IMF) loan programme would be last for Pakistan.

The current $7 billion IMF loan programme under the Extended Fund Facility (EFF) will get concluded in September–October 2027.

This is the 24th IMF programme for Pakistan in the past seven decades - since 1958.

The governor maintained the domestic economy has continued to remain stable and improved gradually over the past three years, leading towards achieving sustainable growth, going forward.

“Whatever we will do, we will do to sustain this [stabilisation] momentum. We will continue to maintain the momentum over the next two year,” Ahmad said

“Going forward, no balance of payment issues are seen arising. The ongoing fiscal year will also end in good condition [in terms of the balance of payment] despite rising import bills and contraction in exports. The foreign debt repayments are expected to be made on time, foreign exchange (FX) reserves are projected to grow, and the current account deficit is expected to remain manageable in the year [FY27],” he said.

The SBP has projected the current account deficit would remain in the range of 0-1% of GDP. “In my personal opinion, the current account deficit would remain below or around half-a-percentage points of GDP,” Ahmad said.

The inflation reading is expected to remain in the targeted range of 5-7%. The rising inflows of workers’ remittances - that are projected to surge to $42 billion FY26 from $38.3 billion in FY25 - would help boost the foreign exchange reserves.

Also read: Inflation in Pakistan clocks in at 5.8% in January 2026

Earlier in January 2026, Ahmad said the FX reserves (held by SBP) would hit a new all-time high at $20.20 billion by end of December 2026 from $16.2 billion at present.

Ahamad recalled on Friday that the central bank sold US dollars worth $8 billion in the inter-bank market in the fiscal year 2021-22 to meet the then market requirements, washing away a big portion of the central bank FX reserves to support the then unsustainable growth. This had resulted in a record high current account deficit of 4.7% of GDP (or $17.6 billion) in FY22, forcing the government and the SBP to take harsh measures to fix the then economy, which resulted into controlling imports and took inflation reading to multi-decade high of 38% in May 2023.

He said the nation could achieve a high growth of 6% again. However, that would not be sustainable under the provided conditions and circumstances.

“We will avoid repeating the past mistakes [of utilising FX reserves for unsustainable high growth], but would make attempts to achieve the high growth in gradual manners and with sustainability,” he central bank chief said.