SBP Projects GDP Growth at 3.75–4.75%, Flags Middle East War Risks
The State Bank of Pakistan has projected GDP growth for fiscal year 2026 in the range of 3.75 to 4.75 percent, offering a cautiously optimistic outlook for the economy while explicitly flagging ongoing conflict in the Middle East as a material downside risk. The central bank's forecast reflects an economy in gradual recovery but still exposed to external shocks.
The SBP's growth projection is broadly in line with expectations from the International Monetary Fund and World Bank, though both multilateral institutions have flagged similar risks from global commodity volatility and regional instability. Pakistan's economic recovery has been underpinned by easing inflation, stabilising foreign exchange reserves, and improved fiscal discipline under its IMF programme.
The Middle East war risk cited by SBP pertains primarily to potential disruptions in oil supply chains, upward pressure on global energy prices, and tightening freight and shipping conditions through critical maritime corridors including the Strait of Hormuz and Bab-el-Mandeb. Pakistan imports a significant portion of its crude oil and LNG from Gulf markets.
The central bank's assessment serves as a baseline for monetary policy calibration in the coming quarters. Analysts noted that the upper end of the growth range is achievable if external conditions remain stable and domestic demand continues to recover, but cautioned that any escalation in Middle East hostilities could compress the projection materially.
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