Pakistan Economy: Pakistan’s central bank governor, Jameel Ahmad, has projected the nation’s economy to grow by up to 4.75% in the fiscal year 2026, countering a recent downgrade by the International Monetary Fund (IMF). Ahmad, in written responses to Reuters, emphasized the broad and durable nature of the recovery, which he believes extends beyond the headline export data.
The State Bank of Pakistan has revised its fiscal year 2026 growth forecast to a range of 3.75% to 4.75%, an increase of 0.5 percentage points from its previous estimate. This optimistic outlook comes despite a contraction in exports and a widening trade deficit in the first half of the year.
Ahmad attributed the differences in projections to timing issues, noting that the IMF’s latest outlook incorporated assessments related to recent floods. He affirmed the central bank’s confidence in the resilience of agricultural activity, which has reportedly performed better than expected despite adverse conditions.
Financial conditions have improved significantly following a cumulative 1,150-basis-point reduction in the policy rate since June 2024. The central bank maintained its benchmark rate at 10.5% last month, defying market expectations for a cut.
Pakistan’s economic divergence with the IMF occurs as the country emerges from a balance-of-payments crisis under a $7 billion IMF program. Ahmad highlighted strong remittances and a 6% growth in large-scale manufacturing from July to November as indicators of strengthening demand.
Despite the decline in exports, Ahmad pointed to low global prices and border disruptions as contributing factors rather than a decrease in activity. He projected the current account deficit to remain within 0-1% of GDP, supported by robust remittances that offset the trade gap.
Looking ahead, Pakistan plans to issue panda bonds to diversify its external financing. Ahmad emphasized the importance of structural reforms to sustain growth and improve productivity.
Published in SouthAsianDesk, February 12th, 2026
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