State Bank of Pakistan Governor Jameel Ahmad on Friday said the country’s economy is expected to remain in a phase of recovery and stabilisation over the next two years, as policymakers deliberately avoid pursuing high growth levels that could prove unsustainable under prevailing economic conditions. The remarks underscore a shift toward consolidation and durability rather than short-term expansion driven by external imbalances.
Briefing the media on domestic economic conditions and the forward outlook, the central bank chief said the direction of policies and actions taken by both the government and the SBP would determine whether the ongoing International Monetary Fund programme becomes Pakistan’s final engagement with the lender. The current IMF arrangement, a $7 billion loan under the Extended Fund Facility, is scheduled to conclude between September and October 2027.
Ahmad noted that the present IMF programme marks the 24th such arrangement for Pakistan over the past seven decades, dating back to 1958. He stressed that breaking this historical cycle depends on maintaining discipline, avoiding policy reversals, and sustaining macroeconomic stability once the programme ends.
According to the governor, the domestic economy has remained stable and has gradually improved over the past three years, laying the foundation for more sustainable growth in the period ahead. He said the authorities are committed to preserving this stabilisation momentum, rather than sacrificing it for short-lived gains. Ahmad emphasised that maintaining stability over the next two years is a central policy objective for the SBP.
Looking ahead, the governor said no immediate balance of payments pressures are expected to emerge. He stated that the ongoing fiscal year is projected to end in a relatively strong position in terms of external accounts, even as import bills rise and exports experience contraction. Foreign debt repayments are expected to be met on schedule, foreign exchange reserves are projected to grow, and the current account deficit is expected to remain manageable during fiscal year 2027.
The SBP has projected that the current account deficit will remain within the range of zero to one percent of gross domestic product. Ahmad added that, in his personal assessment, the deficit is likely to stay below or around half a percentage point of GDP. He also said inflation is expected to remain within the central bank’s targeted range of five to seven percent, reflecting tighter monetary and fiscal coordination.
A key support for external stability, according to the governor, is the continued rise in workers’ remittances. Remittance inflows are projected to increase to $42 billion in fiscal year 2026, up from $38.3 billion in fiscal year 2025, providing a steady source of foreign exchange and helping to strengthen reserve buffers. Earlier in January 2026, Ahmad had said that SBP-held foreign exchange reserves are expected to reach a new all-time high of $20.20 billion by the end of December 2026, compared to $16.2 billion at present.
Reflecting on past policy choices, the governor recalled that the central bank sold $8 billion in the interbank market during fiscal year 2021–22 to meet market demand, significantly eroding reserves in support of what he described as unsustainable growth. That period resulted in a record current account deficit of 4.7 percent of GDP, or $17.6 billion, in fiscal year 2022. The subsequent adjustment required strict measures to curb imports and restore balance, pushing inflation to a multi-decade high of 38 percent in May 2023.
Ahmad said Pakistan is capable of achieving growth rates of around six percent again, but cautioned that such growth would not be sustainable under current circumstances if it relies on excessive external borrowing or reserve depletion. He stressed that the authorities intend to avoid repeating past mistakes and will instead pursue higher growth gradually, anchored in stability and sustainability.
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