On Monday 26th January 2026, State Bank of Pakistan announced monetary policy statement where Policy rate was maintained at 10.5% whereas market expectations were of potential rate cut. SBP stated that country’s economic output has significantly improved, however, core inflation has steadied around a relatively higher level of 7.4 percent in recent months.
SBP Governor Jameel Ahmad announced the monetary policy decision during a press conference held at SBP Karachi. As per SBP’s statement, large scale manufacturing (LSM) and other important indicators have shown positive growth indicating economic activities are gaining momentum faster than anticipated. Cumulative LSM growth of 6.0 percent was noted during July to November FY 26.
Pakistan’s external current account registered a deficit of US$ 1.2 Billion during 1st half of Financial Year 2026 which was mainly led by widening trade deficit due to substantial growth in imports and decline in exports.
Headline inflation y/y eased to 5.6 percent in December from 6.1 percent in November 2025 due to lower food prices. SBP stated that potential risks were volatility in global commodity prices and unanticipated adjustments in energy prices which can impact growth outlook.
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