S&P sees inflation at 5.1–5.6% as projections line up with SBP outlook

Adviser to the Finance Minister, Khurram Schehzad, on Tuesday said that Standard & Poor's Global Market Intelligence’s latest macroeconomic forecasts for Pakistan largely match projections from the State Bank of Pakistan, with both pointing to easing inflation and gradual economic improvement, according to a statement on Tuesday.

S&P expects inflation at 5.1% in 2026, rising slightly to 5.6% in 2027, figures that fall within the SBP’s 5%–7% forecast range for the next two years. “S&P’s point forecasts, i.e. 5.1–5.6%, sit within SBP’s 5–7% band, and imply stable-to-slightly higher inflation from 2026 to 2027,” he said.

On the external sector, S&P projects Pakistan’s current account deficit at 0.5% of GDP in 2026, increasing to 1.3% in 2027. SBP forecasts for FY26 put the deficit between 0% and 1% of GDP. “For FY26, S&P’s 0.5% deficit aligns with SBP’s 0–1% range. S&P’s other-year projection, i.e. 1.3% is slightly above SBP’s FY26 band,” the adviser said.

S&P sees real GDP growth at 3.5% in FY26, strengthening to 4.4% in FY27, while SBP projects growth between 3.75% and 4.75% for FY26. “S&P expects growth to pick up in FY27 to 4.4%, which is within SBP’s FY26 range,” he added, noting a shared assessment of easing inflation and gradual economic improvement despite some differences on growth and current account figures.

“Overall, S&P’s projections broadly align with SBP’s outlook, with slight differences on growth and the current account but a shared assessment of easing inflation and gradual economic improvement,” said Schehzad.