SBP flags inflation uptick, cautions on external position

April 27, 2026 (MLN):  Pakistan’s central bank has cautioned that inflation is already picking up and is expected to rise further, even as it remains within the target range for now, according to remarks made by the SBP Governor at an analyst briefing.

The Governor noted that both headline and core inflation are on an upward trajectory, with external pressures particularly geopolitical tensions in the Middle East likely to add further momentum in the coming months.

On the real economy, GDP growth was recorded at 4.9% in the second quarter, indicating gradual recovery. However, external sector vulnerabilities continue to dominate the macro outlook.

Despite sizeable debt repayments, including $1.3 billion Eurobond and $3.45 billion to the UAE, official reserves have remained broadly stable.

The country also settled $21.2 billion in obligations, while around $2.4 billion is expected in rollover support, leaving approximately $1.5 billion in remaining exposure.

The SBP projected reserves at $18 billion by June 2026, though this still translates into less than three months of import cover, highlighting persistent external vulnerability.

The Governor stressed that while short-term stability has been achieved, the external position remains highly sensitive to global shocks.

Furthermore, he also highlighted that latest stress testing suggests that worker remittances for the current year are expected to remain broadly resilient at around $41 billion, only slightly below the pre-war projection of $42 billion.

Despite global uncertainty, geopolitical tensions, and shifting labor market conditions in key host countries, inflows have demonstrated notable stability providing a crucial support pillar to Pakistan’s external account.

Copyright Mettis Link News