KARACHI: The State Bank of Pakistan (SBP) has projected upward GDP growth in the wake of increased economic activity and continued momentum in high-frequency indicators.

The SBP released the data and analysis in the bi-annual Monetary Policy Report on Monday, noting that the growth outlook for FY26 has improved by 0.5 percentage points relative to the previous report, and real GDP growth is now projected at 3.75-4.75pc in FY26, with further improvement expected in FY27.

The economic growth has picked up noticeably, as reflected by higher year-on-year growth in Q1FY26 and improving trends in agricultural and industrial production, with positive spillovers expected for services sector activity, said the report.

Inflation is projected to remain within the 5-7pc target range for most of FY26 and FY27, despite near-term volatility, the report said.

The report noted that macroeconomic conditions and the outlook have improved, supported by a prudent monetary policy stance and continued fiscal consolidation.

The current account deficit is projected to remain contained at 0-1pc of GDP in FY26, with a higher trade deficit partly offset by robust workers’ remittances and planned official inflows.

As a result, SBP’s foreign exchange reserves are expected to rise to $18bn by June 2026.

The SBP recently reduced the CRR from 6pc to 5pc to increase banks’ liquidity and enhance the availability of funds to the private sector.

Published in Dawn, February 10th, 2026