Pakistan’s economy in better position to withstand external shocks: SBP governor

State Bank of Pakistan (SBP) Governor Jameel Ahmad has told global investors that Pakistan’s macroeconomic conditions have improved, with foreign exchange reserves rising to $21.5 billion and inflation declining sharply, strengthening the economy’s ability to withstand external shocks.

Addressing high-level meetings with foreign investors on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand, Ahmad attributed the improvement to sustained macroeconomic policies and structural reforms.

According to an SBP press release on Saturday, the meetings brought together senior executives from leading global financial institutions, including JP Morgan, Citibank, Jefferies, Deutsche Bank, Barclays, Bank of America, MSCI, Standard Chartered and Mitsubishi UFJ Financial Group. The governor also met bilateral and multilateral partners, central banks and global credit rating agencies.

Ahmad said inflation had fallen sharply from elevated levels in FY23 to near the target range in FY26, despite a significant oil price shock. Economic growth, which contracted in FY23, has gradually recovered, reaching 3.7% in FY26. Growth is projected at 3.5% to 4.5% in FY27.

The country’s external buffers have also strengthened considerably. Official foreign exchange reserves, which fell below $3 billion in February 2023, reached $21.5 billion as of October 9, 2026, while the SBP’s forward liabilities declined from more than $5.7 billion to less than $1 billion.

The central bank said the improvement was largely driven by its foreign exchange purchases, while the country’s external debt stock increased only marginally over the past three years. These purchases were facilitated by an almost balanced current account in FY26.

Regulatory reforms, particularly those targeting exchange companies and encouraging remittances through formal channels, have also improved liquidity in the interbank foreign exchange market, according to the SBP.

The central bank expects foreign exchange purchases to continue, with the current account deficit projected to remain contained at between zero and 1% of gross domestic product in FY27.

Pakistan’s fiscal position has strengthened as well, with the primary fiscal balance recording a third consecutive annual surplus in FY26. The public debt-to-GDP ratio has consequently continued on a downward trajectory, the SBP said.

Ahmad also informed investors that a staff-level agreement had been reached with the International Monetary Fund (IMF) on the reviews under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).

He said continued implementation of the reform agenda had improved investor confidence, contributed to upgrades in Pakistan’s sovereign credit ratings and facilitated access to international capital markets despite a challenging global environment.

The governor said Pakistan’s economic fundamentals remained strong, supported by a prudent policy mix that had helped cushion the impact of multiple shocks over the past three years.

While ongoing geopolitical developments posed challenges, he said Pakistan was in a significantly better position to withstand the latest shock than during previous periods of external stress.

Ahmad reaffirmed the SBP’s commitment to preserving macroeconomic stability, strengthening external buffers and advancing structural reforms to support sustainable economic growth.