Economists warn 3.7% growth not enough

Governor Jameel Ahmad of the State Bank of Pakistan said on Thursday, at an Independence Day flag-hoisting event, that the economy has advanced toward stability over the past year, helped by careful fiscal and monetary management. According to The Express Tribune, he said the country is moving from stabilisation to sustainable growth, with the SBP focused on price stability and reforms. He put average FY26 inflation at 7.1% and argued that the current policy stance suits keeping inflation within the 5-7% medium-term target.

Growth came in at 3.7% for FY26, with projections of 3.5% to 4.5% for FY27, and Ahmad called the outlook an encouraging sign of more durable expansion. Other experts argue the economy must expand by at least 5-6% a year to absorb population growth and create jobs for millions joining the workforce annually. A textile exporter, speaking on condition of anonymity, said recovery still depends heavily on remittances rather than broad export or industrial gains, and that headline inflation within target hides strain on poorer households.

Remittances topped $41 billion in FY26, with $44 billion expected in FY27, and foreign exchange reserves ended FY26 at $18.4 billion. Retail digital transactions rose from about 10 billion to 12 billion, the governor said, while the PRISM+ payments platform aligned settlement with international standards. He acknowledged that challenges remain despite the progress.