The State Bank of Pakistan (SBP) has stated that while the GDP growth target of 4.2% for the fiscal year 2025-26 (FY26) is “achievable,” it remains a “challenging goal” due to potential risks, particularly in the agriculture sector, Business Recorder reported.

During a recent briefing of SBP with analysts, Governor Jameel Ahmed announced that the central bank will release its own economic outlook in July, covering projections for GDP, inflation, the current account, and foreign exchange reserves.

According to a report by Arif Habib Limited Research, the SBP expects this growth to be primarily driven by the industrial and services sectors.

“Positive indicators include strong import volumes, a recovery in auto sales, increased capacity utilization, improved employment sentiment, and a Purchasing Managers’ Index (PMI) consistently above 50 since December 2024,” he said.

Ahmed also noted that debt repayments for FY25—totaling $25.8 billion, are nearly complete, with only $400 million outstanding.

He stated that repayments for FY26 are expected to be of a similar magnitude, with further details to be shared at the upcoming Monetary Policy Committee (MPC) meeting.

The SBP projects a current account surplus for FY25, supported by stronger external buffers heading into FY26.

Worker remittances are expected to rise sharply to $38 billion in FY25, compared to $31.3 billion last year, largely due to a one-time shift from informal to formal channels.

The SBP, in coordination with banks and government stakeholders, is working on incentives to sustain this trend.

The briefing also explained a recent rise in Open Market Operation (OMO) stock, attributing it to increased currency circulation during Eid and a temporary gap between debt repayments and incoming foreign inflows.

However, the SBP expects OMO levels to normalize in the coming weeks as inflows are realized.

Additionally, the SBP confirmed that it will transfer a profit of Rs 2.4 trillion to the government in early FY26, pending audit and board approval.

This amount, already included in the FY26 federal budget, reflects the central bank’s earnings under the revised SBP Act, which mandates annual rather than quarterly profit transfers.

Ahmed also reaffirmed that the SBP is on track to meet the June Net International Reserves (NIR) target under the IMF program, having already exceeded the December 2024 target by a wide margin. The SBP’s baseline assumption for global oil prices remains at $75 per barrel.