ISLAMABAD: S&P Global Market Intelligence has projected a strengthening of Pakistan’s macroeconomic outlook in the current and next fiscal years, endorsing the State Bank of Pakistan’s (SBP) projections.

Real GDP to expand 3.5 per cent in FY26, before strengthening to 4.4pc in FY27, it said while commenting on SBP’s monetary policy decision that kept benchmark interest rate unchanged at 10.5pc on Monday.

This is generally in line with SBP that projected real GDP growth in the range of 3.75-4.75pc in 2025-26, reflecting stronger-than-anticipated momentum in commodity-producing sectors and spillovers to services. This momentum is expected to extend into FY27, aided by earlier monetary easing and ongoing macroeconomic stability.

These projections are relatively higher than 3.2pc growth rate projected by the International Monetary Fund last week, down from 3.6pc of its previous estimate.

On the external front, the SBP projected the current account deficit to remain within 0-1pc of GDP in FY26. With continued remittance inflows and planned official financing, foreign exchange reserves are projected to surpass $18bn by end-June 2026 and rise further in FY27, approaching the benchmark of three months of import cover, the central bank had observed.

S&P Global Market Intelligence (not S&P Global Ratings) projected a current account deficit of 0.5pc and 1.3pc of GDP, respectively, in calendar years 2026 and 2027 with a disclaimer. “Risks weigh on the downside, owing to elevated global tariff uncertainty, volatile commodity prices, and geopolitical fragmentation,” S&P noted.

On inflation, the SBP expected stabilisation within the 5-7pc target range over the next two years, after temporarily exceeding the upper bound for a few months during calendar year 2026.

The S&P, on the other hand, projected inflation to come at 5.1pc in 2026 before slightly inching upwards to 5.6pc in 2027, again with a caveat. “Risks to the inflation outlook are tilted to the upside, linked to volatility in global commodities and domestic wheat prices, possible adjustments in administered energy tariffs, and a stronger-than-assumed pickup in domestic demand,” it concluded.

Published in Dawn, January 28th, 2026