KARACHI, Jul 03 (APP):Governor State Bank of Pakistan Jameel Ahmad, expressing confidence for better economic outlook of different sectors of the economy during the new financial year, on Friday said that the national economy is gradually improving year after year. State Bank’s foreign exchange reserves closed at $ 18.4 billion by end of financial year 2025-26, remittances are growing, inflation is contained within the targeted range and GDP growth and …
SBP Governor sees economy further stabilizing amid gradual improvement in different sector
KARACHI, Jul 03 (APP):Governor State Bank of Pakistan Jameel Ahmad, expressing confidence for better economic outlook of different sectors of the economy during the new financial year, on Friday said that the national economy is gradually improving year after year.
State Bank’s foreign exchange reserves closed at $ 18.4 billion by end of financial year 2025-26, remittances are growing, inflation is contained within the targeted range and GDP growth and external account balance is expected to remain as per earlier projections, he stated while addressing a press conference.
The SBP Governor recalled the economic woe Pakistan faced in 2022-23, saying that gradual amelioration has been witnessed in each passing year while further improvement is expected to be shown in final outcomes for FY26.
He said that PBS has estimated the GDP growth for FY26 at 3.4% while SBP projects that it may reach 3.7%. Though the manufacturing and services sectors performed well during the FY26 Middle East situation and lower than expected agricultural output affected the overall GDP growth, he argued and added that settling down of the Middle East crisis will support growth in the new fiscal year.
The monthly inflation in June 2026 rose to 11% due to commodity price hike in the international market while average inflation for the 11 months of FY26 is calculated 7.05% that falls near the upper range of projected target range, he said, adding that inflation outlook for the coming months is expected to improve.
The external account had always remained upsetting a few years back but signs of improvement are evident from the past two years as it recorded a surplus of in FY2024-25 and 11 months of FY26 also posted a surplus, he stated.
The central bank successfully managed the foreign exchange reserves during the outgoing fiscal year, he said, adding that despite repayment of external loans and liabilities it was closing FY26 with liquid foreign reserves of $18.4 billion depicting around $3.5 billion increase from the closing of previous year.
He stated that SBP liabilities amounted to $ 5.6 billion at the beginning of the fiscal year which were brought down to $ 950 million by end of the year, debt was paid back as per schedule, there was no pressure on imports and the external payment situation has improved.
The SBP Governor said that external debt of the country has been maintained at $ 100 billion for four years and no significant addition was made in it. In contrast we have improved the debt quality by replacing the short term loans with the long term loans having longer maturity and repayment periods, he informed.
Economic stability, increased reserves and other factors upgraded Pakistan’s outlook in the international bond market and now we are getting better rates, he said, adding that the latest Euro Bond issue was settled at below 7% rate and further decrease is expected in future issues.
Highlighting the multifaceted efforts of the government and SBP for enhancing the remittances, he said that total remittances in FY25 were recorded as $38 billion while in FY26 it is expected to reach near $41.5 billion despite the Middle East crisis and in the new FY27 it is projected to rise to $44 billion.
Jameel Ahmad informed that work was underway to rationalize the remittance support schemes and certain incentives were phased out so that support mechanisms could be transformed into market oriented initiatives. The scheme to incentivize TT charges has been discontinued and authorized dealers were asked to continue implementing the scheme at their end while preserving its key features, he added.
The government is mulling over to launch a better incentivized and prized based scheme this year to maintain the momentum of inflows of remittances which are our lifeline, he informed and added that changes in Roshan Digital Account also helped increase the inflows which averaged $300 million per month.
Responding to a query regarding BUNA-RAAST integration the governor said that arrangements in this regard will be finalized by the end of the calendar year and overseas Pakistanis would be able to benefit from the direct connectivity.
On another question regarding impact of discontinuing remittance schemes, he said that enforcement actions, control on smuggling and Hawal Hundi trading, reforms in exchange companies and utilization of banking channels for transactions were the major factors behind rise in remittances.
Though remittances support the current account, he said, trade imbalance was the major concern and we have to grow our exports to deal with the issue, he said.
On another query about PM Apna Ghar Housing Scheme, the governor said that the scheme was one of the successful schemes announced and its take off is very impressive with higher approval and disbursement levels.
