ISLAMABAD: Pakistan’s improving economic indicators are unlikely to trigger an immediate shift in monetary policy, with the State Bank of Pakistan (SBP) expected to maintain a cautious approach as inflation and external risks continue to weigh on the outlook, according to a new report by S&P Global Market Intelligence.
According to the latest assessment by S&P Global Market Intelligence, the central bank’s decision to keep the policy rate unchanged at 11.5% reflects a prudent strategy aimed at preserving macroeconomic stability.
The report noted that while Pakistan’s economy has shown signs of recovery, inflation remains above the central bank’s desired range, limiting the room for aggressive monetary easing.
S&P Global warned that renewed tensions in the Middle East, volatility in global commodity prices and the growing impact of climate change continue to pose significant risks to Pakistan’s economic outlook.
The report projects Pakistan’s economy to grow by 3.5% in fiscal year 2027, supported by improving macroeconomic conditions and stronger external sector performance.
It also forecasts that the country’s foreign exchange reserves could reach $19.5 billion by December 2026, driven largely by resilient workers’ remittances and a relatively contained current account deficit.
S&P Global said stronger remittance inflows are expected to improve Pakistan’s external financing position and help ease pressure on the balance of payments.
Commenting on the outlook, S&P Global Principal Economist Ahmed Mobeen stressed that maintaining fiscal discipline remains essential, particularly in light of the country’s debt repayment obligations.
He added that although economic conditions have stabilised, the State Bank is expected to continue prioritising price stability while closely monitoring global and domestic risks before making further policy adjustments.
