Jameel Ahmad says stronger reserves, record remittances and a stable external sector are laying the foundation for sustained economic growth
KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad on Friday expressed confidence in Pakistan’s economic outlook, saying the country’s economy has steadily improved over the past several years, supported by higher foreign exchange reserves, record remittance inflows and a stronger external sector.
Addressing a press conference, the SBP governor said the central bank’s foreign exchange reserves rose to $18.4 billion by the end of FY2025-26, an increase of approximately $3.5 billion from the previous fiscal year despite scheduled external debt repayments.
He said record workers’ remittances, easing inflationary pressures and improvements in the external account have strengthened Pakistan’s macroeconomic position, while economic growth remains broadly in line with the central bank’s projections.
Economy continues recovery
Jameel Ahmad recalled that Pakistan faced severe macroeconomic challenges during FY2022-23 but said economic conditions have improved consistently since then.
According to him, the Pakistan Bureau of Statistics (PBS) has estimated GDP growth of 3.4 percent for FY2025-26, while the SBP expects the economy to expand by 3.7 percent.
He noted that the manufacturing and services sectors performed well during the year, although agricultural output remained weaker than expected and geopolitical tensions in the Middle East weighed on overall economic activity.
With regional conditions stabilizing, the governor said economic momentum is expected to strengthen further during FY2026-27.
Inflation expected to moderate
The SBP governor said headline inflation accelerated to 11 percent in June 2026, mainly because of higher international commodity prices.
However, average inflation for FY2025-26 stood at 7.05 percent, remaining broadly within the central bank’s projected range.
He expressed confidence that inflationary pressures would ease in the coming months as global conditions improve and domestic supply conditions remain stable.
External sector records major improvement
Highlighting improvements in the external account, Jameel Ahmad said Pakistan posted a current account surplus during FY2024-25, while the first eleven months of FY2025-26 also remained in surplus.
He added that Pakistan’s external payment position has strengthened significantly, reducing financing pressures compared with previous years.
According to the governor, the SBP’s external liabilities declined sharply from $5.6 billion at the beginning of the fiscal year to just $950 million by year-end following scheduled repayments, while imports remained manageable.
Debt profile becomes more resilient
The governor said Pakistan’s external debt has remained around $100 billion over the past four years without any significant increase.
He explained that the government has improved the quality of external borrowing by replacing short-term liabilities with longer-term financing, thereby reducing refinancing risks.
Jameel Ahmad added that the country’s stronger macroeconomic fundamentals have enhanced investor confidence, noting that Pakistan’s latest Eurobond issuance was priced below 7 percent, with borrowing costs expected to decline further in future international issuances.
Remittances seen reaching $44 billion
Describing overseas Pakistanis as a key pillar of the economy, the governor said workers’ remittances increased from $38 billion in FY2024-25 to an estimated $41.5 billion during FY2025-26 despite regional geopolitical tensions.
For FY2026-27, the SBP projects remittance inflows to reach approximately $44 billion.
He said the central bank is gradually moving toward market-based remittance incentives, confirming that the telegraphic transfer (TT) charges incentive scheme has been discontinued while authorized dealers will continue providing free remittance services under existing operational arrangements.
The government is also considering introducing a new incentive and prize-based scheme to sustain remittance growth.
Jameel Ahmad added that enhancements to the Roshan Digital Account initiative have helped maintain average monthly inflows of around $300 million.
RAAST-BUNA integration on track
Responding to a question, the SBP governor said integration between Pakistan’s RAAST instant payment system and the regional BUNA cross-border payment platform is expected to be completed by the end of the current calendar year.
The integration will enable overseas Pakistanis to make faster, cheaper and more efficient cross-border transactions through direct connectivity.
Exports remain the biggest challenge
Despite strong growth in remittances, Jameel Ahmad emphasized that expanding exports remains Pakistan’s biggest structural economic challenge.
He said improvements in remittance inflows have also been supported by stronger action against illegal hawala-hundi networks, tighter anti-smuggling measures, reforms in exchange companies and greater use of formal banking channels.
Commenting on the government’s PM Apna Ghar Housing Scheme, the governor described it as one of the country’s most successful public initiatives, saying loan approvals and disbursements have exceeded initial expectations since its launch.