KARACHI: Pakistan’s central bank chief expects the current account balance to remain in surplus for the fiscal year 2026 that ended June 30 amid a significant improvement in the external sector.
Governor State Bank of Pakistan Jameel Ahmad mentioned that the current account figures for June and FY26 are currently being finalised.“I am quite confident that the June number will also be good, so overall we are expecting the current account balance to be slightly in surplus for the fiscal year 2026,” Ahmad said at the two-day Pakistan Banking Summit 2026.
He said the current account surplus was supported by workers’ remittances and services exports despite higher imports.For the first 11 months of FY26, the current account recorded a surplus of $255 million. This surplus is noteworthy, as it was also present in the previous fiscal year (FY25), when it accounted for approximately 0.5 percent of GDP.
Earlier, the SBP projected the full-year deficit to remain within 0-1 percent of GDP, positioning it at the lower end of the central bank’s target range. This indicates a stable situation with neither a significant surplus nor a deficit.
Ahmad said the State Bank has been able to increase its foreign exchange reserves from approximately $3 billion in 2023 to well above $18.4 billion. The increase in reserves occurs despite large debt repayments, besides a reduction in forward and SWAP liabilities. The forex reserves have increased sixfold over the past three years.
The governor expects the upward momentum in FX reserves to continue this fiscal year, as the central bank targets reserves exceeding $20 billion by the end of December 2026.He noted that FY26 was another challenging year for Pakistan’s economy in the wake of the Middle East conflict and the earlier floods. However, despite strong headwinds, our economy displayed exceptional resilience, and most economic indicators turned out better than SBP’s and other stakeholders’ expectations.
Real GDP was growing at a robust pace of 4.0 per cent during July-March FY26, reflecting acceleration in all three sectors, particularly industry and services, according to Ahmad. However, with anticipated slowdown in Q4-FY26 due to geopolitical developments and temporary austerity measures, full year GDP growth is provisionally estimated at around 3.7 per cent. “Going forward, we are expecting growth momentum to pick up in FY27 and real GDP growth to turn out higher than in FY26,” he said.
“The SBP’s policy priorities remain firmly anchored in preserving macroeconomic and financial stability. “At the same time, we are working to strengthen the financial sector’s role in supporting resilient, inclusive, and sustainable economic growth,” Ahmad said.
“Accordingly, the SBP is pursuing a forward-looking reform agenda. Our focus is on accelerating digital transformation, harnessing emerging technologies, including artificial intelligence, promoting customer-centric financial services, expanding financing for priority sectors, and integrating climate and sustainable finance into the financial system,” he added.
According to the governor, there are two key areas that are central to Pakistan’s financial future. The first is digital transformation. The second is expanding financing for priority sectors.
Today, more than 92 per cent of retail financial transactions are processed digitally, compared with around 50 percent only a few years ago, he said. This growing digital ecosystem is supported by 268 million financial accounts and more than 49 million uniquely registered Raast IDs.
“We have also reached an important milestone by mandating the digitisation of all federal, provincial, and local government disbursements through secure digital wallets,” Ahmad said. According to the SBP’s chief, digital transformation should make banking simpler, faster, and more convenient for every customer. This means easier account opening, paperless banking, faster payments, better complaint resolution and clearer communication. Banks should make greater use of data analytics and artificial intelligence to personalise services, improve risk management, and strengthen customer support. At the same time, greater investment in financial and digital literacy will help customers use these services with greater confidence.
He noted that outstanding SME financing more than doubled between June 2021 and December 2025. During the same period, the number of SME borrowers increased by around 75 percent. This reflects meaningful progress in expanding access to formal finance. However, much more remains to be done.
“Together with the government, we have set a target of increasing outstanding SME financing to Rs1.5 trillion by June 2028. We also aim to expand the number of SME borrowers to 750,000,” he said.“These targets are ambitious, but they are achievable. Their success will depend on the banking industry’s willingness to innovate and scale up financing models,” he added.
