The State Bank of Pakistan (SBP) projected a profit of Rs2.4 trillion for the fiscal year ending June 2025. Governor Jameel Ahmad, during a briefing following a rate cut decision, confirmed that the bank is on track to meet the government’s estimated target for the year.
This follows a record profit of Rs3.42 trillion in the previous fiscal year (FY24), driven by high interest rates and exchange gains. The profit for FY25 will be transferred to the government following an audit and board approval, with the amount included in the FY26 budget.
The SBP’s policy rate remains unchanged at 11 percent, amid concerns of rising inflation due to geopolitical tensions, especially the conflict between Israel and Iran. The SBP highlighted that while the 4.2 percent GDP growth target for FY25 is achievable, it faces challenges, especially in the agriculture sector.
Economic growth is expected to be driven by the industrial and services sectors, supported by strong import volumes, a recovery in auto sales, rising capacity utilization, and improving employment sentiment. The SBP plans to release its own economic assessment in July, which will provide projections for GDP, inflation, the current account balance, and foreign exchange reserves.
The governor also provided an update on external debt repayments, noting that $25.8 billion will be repaid in FY25, with $400 million remaining to be settled within two weeks. Looking ahead, external debt repayments are expected to remain similar in FY26, with further details expected in the upcoming Monetary Policy Committee (MPC) meeting by July 2025.
Additionally, the SBP is working to maintain a foreign exchange reserve target of $14 billion by the end of June 2025, with a projected current account surplus for FY25. Remittances are expected to reach $38 billion, up from $31.3 billion last year, driven by the shift from informal to formal channels.
The SBP confirmed it is on track to meet the net international reserves (NIR) target under the IMF loan programme, with the December 2024 target already exceeded. Open market operations (OMO) levels are expected to decline as incoming inflows materialize in the coming weeks.
