The State Bank of Pakistan’s Monetary Policy Committee kept the policy rate unchanged at 10.5%, judging that the inflation and external-account outlook remains broadly consistent with its previous assessment while economic growth is improving faster than expected. Headline inflation was 5.6% year on year in December 2025, in line with the MPC’s expectations, while core inflation has steadied at a higher level around 7.4% in recent months. High-frequency indicators, including large-scale manufacturing, point to faster-than-anticipated momentum in domestic-oriented activity, alongside a widening trade deficit driven by higher imports and weaker exports; resilient workers’ remittances and benign global commodity prices helped keep the current account deficit relatively contained. The MPC also noted that real GDP growth was provisionally reported at 3.7% since its last meeting.
State Bank of Pakistan 2026-01-26
State Bank of Pakistan holds policy rate at 10.5% as growth outlook strengthens
The State Bank of Pakistan's Monetary Policy Committee maintained the policy rate at 10.5%, citing consistent inflation and external-account outlooks with previous assessments, alongside faster-than-expected economic growth. Headline inflation was 5.6% year-on-year in December 2025, with core inflation steady at 7.4%, while high-frequency indicators show increased domestic activity and a widening trade deficit.