PTBP Web Desk
The Pakistan economy growth outlook for the fiscal year 2026 remains optimistic, as the Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, on Thursday projected economic expansion between 3.75% and 4.75%. The forecast reflects improving macroeconomic indicators and gradual recovery following a period of economic stress.
The SBP governor made these remarks while chairing a meeting of the Agricultural Credit Advisory Committee (ACAC), which reviewed the performance and future direction of agricultural lending in the country. He reiterated that Pakistan has regained macroeconomic stability and is now transitioning towards sustainable and inclusive economic growth.
GDP Growth and Inflation Trends
Providing further insight into the economic outlook, Jameel Ahmad noted that GDP growth stood at 3.7% in the first quarter of FY26, aligning closely with the central bank’s annual projections. He emphasized that the full-year growth estimate of 3.75% to 4.75% reflects confidence in stabilizing economic fundamentals.
At the same time, inflationary pressures have eased significantly, with general inflation declining to 5.8% in January 2026. Analysts believe this reduction in inflation has helped restore purchasing power and improve business sentiment across multiple sectors of the economy.
Agricultural Credit Sees Record Growth
A major highlight of the ACAC meeting was the strong performance of agricultural financing. According to the SBP governor, a record Rs2.58 trillion in agricultural loans was disbursed during FY25, marking a 16% year-on-year increase. This surge reflects enhanced access to finance for farmers and improved banking outreach in rural areas.
In the first half of FY26 alone, agricultural loans amounting to Rs1,412 billion were disbursed, while the number of borrowers increased to 2.97 million. Jameel Ahmad stressed that agriculture remains a backbone of the national economy, playing a vital role in food security, rural livelihoods, and farm productivity.
Digital Lending and Zarkhez-e Initiative
The SBP governor strongly emphasized the adoption of the Zarkhez-e digital lending platform, aimed at expanding agricultural credit access through technology-driven solutions. He urged banks to leverage SBP initiatives such as the Risk Coverage Scheme for Small Farmers and Underserved Areas, particularly to reach farmers in unbanked and underserved regions.
The ACAC also reviewed progress on electronic warehouse receipt financing, a system designed to enhance post-harvest liquidity. This initiative helps reduce forced crop sales, stabilize farm incomes, and strengthen agricultural market linkages across the value chain.
Monetary Policy and IMF Context
In a written response to Reuters, Jameel Ahmad stated that financial conditions had eased considerably following a cumulative 1,150 basis-point reduction in the policy rate since June 2024. He noted that the full impact of these rate cuts was still working through the economy, supporting growth while maintaining price stability.
Last month, however, the SBP opted to keep its benchmark interest rate unchanged at 10.5%, contrary to market expectations of a further cut. This decision came at a sensitive time, as Pakistan continues its recovery under a $7 billion programme with the International Monetary Fund (IMF) following a balance-of-payments crisis.
