KARACHI, October 29, 2026 — State Bank of Pakistan Governor Jameel Ahmad has said the country’s economy continues to recover despite global and regional challenges, with growth improving and the external account remaining relatively stable.
Speaking at a convocation of the Institute of Cost and Management Accountants of Pakistan on Wednesday, Ahmad said Pakistan had made considerable progress towards macroeconomic stability since 2022.
He reported that real gross domestic product growth reached 3.7% in the financial year ending June 2026, following a contraction in FY2023.
The governor expects growth to increase further during the current financial year.
He also projected that the current account deficit would remain between zero and 1% of GDP, indicating an expectation of relatively contained external financing pressures.
On inflation, Ahmad said price increases had remained close to the central bank’s target range during FY2026 but had risen since then.
He expects inflation to gradually return towards the State Bank’s medium-term target range of 5–7%, supported by monetary policy measures.
His remarks follow the central bank’s decision earlier this week to raise its policy rate to 12%, reflecting continued concern about inflationary pressures.
Higher interest rates can help restrain price increases but also raise borrowing costs for businesses and consumers, creating challenges for investment and economic activity.
Ahmad said earlier policy tightening and measures to manage foreign-exchange outflows had helped prevent a deeper external financing crisis.
He also highlighted improvements in financial-sector supervision and the importance of identifying economic risks before they threaten stability.
Although the governor’s assessment points to improving economic conditions, future growth and inflation outcomes will depend partly on international commodity prices, domestic policy decisions and external economic developments.