Foreign Reserves to Reach $18 Billion by June 2026: SBP
The State Bank of Pakistan (SBP) on Monday released its Semi-Annual Monetary Policy Report, highlighting a notable improvement in the country’s macroeconomic conditions and overall economic outlook.
According to the report, the improvement has been supported by a cautious monetary policy stance and continued fiscal consolidation. SBP expects inflation to remain within the target range of 5 to 7 percent for most of fiscal years 2026 and 2027, although some short-term volatility may occur.
The central bank projected that the current account deficit in fiscal year 2026 will remain between zero and one percent of GDP. While the trade deficit is expected to stay elevated, it is likely to be partially offset by strong workers’ remittances and planned official inflows.
As a result, SBP forecasts that foreign exchange reserves will rise to around $18 billion by June 2026. Further improvement is expected in fiscal year 2027, bringing reserve levels close to three months of import cover.
The report noted that ongoing macroeconomic stability, easing financial conditions and the recent reduction in the cash reserve requirement (CRR) to 5 percent have contributed to strengthening economic activity. Consequently, growth prospects have improved, with real GDP growth now projected in the range of 3.75 to 4.75 percent for fiscal year 2026. Economic growth is expected to accelerate further in fiscal year 2027.
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