Macroeconomy & external buffers improve, SBP governor tells investors
KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad has told foreign investors that Pakistan’s macroeconomic conditions and external buffers have improved, positioning the economy to better withstand domestic and external shocks amid ongoing geopolitical challenges.
According to a statement issued by the SBP on Saturday, Ahmad held high-level meetings with foreign investors and representatives of global financial institutions on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand, held from October 12 to 17.
The meetings were organised and attended by senior executives from JPMorgan, Citibank, Jefferies, Deutsche Bank, Barclays, Bank of America, MSCI, Standard Chartered and Mitsubishi UFJ Financial Group. The governor also met bilateral and multilateral partners, other central banks and global credit rating agencies.
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During the meetings, Ahmad said sustained and prudent macroeconomic policies and structural reforms had strengthened Pakistan’s economic resilience. He noted that inflation had declined sharply from elevated levels in FY23 to almost within the target range in FY26, despite a significant oil price shock.
Real gross domestic product (GDP) growth, after contracting in FY23, had gradually recovered to 3.7 percent in FY26. The SBP projects economic growth in the range of 3.5 to 4.5 percent in FY27.
The governor also highlighted an improvement in the country’s foreign exchange reserves. Official reserves recovered from less than US$3 billion in February 2023 to US$21.5 billion as of October 9, 2026, while the SBP’s forward liabilities declined from more than US$5.7 billion to less than US$1 billion.
According to the SBP, the improvement in foreign exchange buffers was largely driven by the central bank’s foreign exchange purchases, while the country’s external debt stock had increased only marginally over the past three years.
The purchases were facilitated by an almost balanced current account in FY26. Regulatory reforms introduced by the SBP, particularly those concerning exchange companies and the channelling of remittances through formal channels, had also improved liquidity in the interbank foreign exchange market.
The central bank expects foreign exchange purchases to continue, with the current account deficit projected to remain contained within 0 to 1 percent of GDP in FY27.
On the fiscal front, Ahmad highlighted that Pakistan had recorded a primary fiscal surplus for the third consecutive year in FY26. The public debt-to-GDP ratio had consequently been on a downward trajectory, according to the statement.
The governor also informed investors that a staff-level agreement had been reached with the International Monetary Fund (IMF) for 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 the country’s access to global capital markets despite a challenging international environment.
Ahmad said Pakistan’s economic fundamentals remained strong, supported by a prudent policy mix that had cushioned the impact of multiple shocks over the past three years.
While acknowledging challenges arising from ongoing geopolitical developments, he said the economy was in a significantly better position to withstand the current shock than during previous periods of external stress.
He reaffirmed the SBP’s commitment to preserving macroeconomic stability, strengthening external buffers and advancing structural reforms to support sustainable economic growth.
Copyright Business Recorder, 2026