ISLAMABAD: The SBP governor, Jameel Ahmad, has made public the GDP growth forecasts of the State Bank of Pakistan for FY2026-27, which indicate the GDP growth rate will be in the range of 3.5 to 4.5 percent. This is an improved figure from last fiscal year's and is a realistic one in view of the fact that the State Bank of Pakistan has taken into consideration the threats posed by volatility in the international prices of commodities, the unrest in the Middle East region, and unfavorable weather conditions to the economy of Pakistan.

SBP GDP Growth — Range Reflects Real Uncertainty

The GDP growth forecast for the SBP FY27 of 3.5to 4.5% is stated as a range and not as a point forecast an unusually high level of explicit recognition of uncertainty, which the Governor explained.

“Uncertainty from the volatile global commodity prices against the backdrop of increased tensions in the Middle East region and unpredictable climatic conditions from El Niño effects may affect growth.”
Governor SBP Jameel Ahmad

The Governor observed that the economy of Pakistan was growing around 4 percent in the early months of FY26 but then saw a slowdown in Q4 owing to the Middle Eastern turmoil, rise in global oil prices, and austerity programs of the government. Indicators such as satellite data, car sales, cement shipments, fertilizer consumption, and business confidence surveys indicate a slight recovery in June, giving FY27 a more solid base to start off with.

GDP growth outlook for FY27 – Remittance flows forecast is the forecast where the central bank has explicitly disagreed with consensus expectation:

"While some market participants have been forecasting a slowdown in remittance flows this fiscal year, the SBP expects Pakistan to attract close to USD 44 billion in workers' remittances during FY27 compared to USD 41.6 billion achieved in FY26."
Governor of the State Bank of Pakistan Jameel Ahmad

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USD 44 billion mark represents an increase of USD 2.4 billion or 5.8 percent against last fiscal year's record of USD 41.6 billion. This is SBP's direct challenge to the market analysts worried about the impact of Gulf war on employment and earnings of the Pakistani workforce.

The SBP growth rate GDP forecast of reserve target of USD20.2 billion for December 2026 is a major jump from the current figure of USD15.9 billion (up to June 19, 2026). The accomplishment of this target will need:

• Scheduled official inflows through IMF (remaining of USD3.6 billion under EFF/RSF), World Bank, ADB, and bilateral sources
  

• Improvement in private inflows - FDI & Portfolio Inflows
  

• Managing the current account deficit in the range of 0 to 1 percent of GDP

The GDP growth forecast for FY27 current account projections recognize that the exceptionally small deficit of US$139 million in FY26, which is practically nothing, will not be able to continue as economic activity increases along with imports.

The anticipated 0 to 1 percent of GDP deficit for FY27 is a conscious decision made by policymakers to support growth through increasing imports while keeping the external balance in check. As the projected GDP of Pakistan in FY27 will be around US$370 to US$380 billion, a 1 percent deficit would come down to about US$3.7 to US$3.8 billion which is doable considering the US$44 billion remittances expected in FY27.

In the SBP’s GDP growth projection for FY27, it was mentioned that the profit remitted by the central bank to the government for FY26 is estimated to be around Rs1.4 trillion, subject to the conclusion of the audit process. The profit remitted by the central bank is one of the largest sources of non-tax revenue for the government, which helps to decrease the budget deficit.