Bank lending to Pakistan’s private sector continued to decline during the first 45 days of the current fiscal year, while Non-Bank Financial Institutions also faced a liquidity crunch. State Bank of Pakistan data showed that businesses were repaying existing debt instead of obtaining new loans. The trend raises concerns about investment and economic activity as the government seeks greater private-sector participation to exceed its 4% GDP growth target for 2026–27.

Finance Minister Muhammad Aurangzeb held high-level meetings with senior IMF officials, where Pakistan’s macroeconomic performance and reform progress were reviewed. Tax and energy reforms, privatization, tariff rationalization, debt management and financing diversification were discussed. Pakistan’s return to international capital markets was also examined. The IMF was thanked for recognizing the country’s strong programme ownership and continued reform progress.

Pakistan’s economic growth forecast has been kept unchanged at 3.5% for 2026-27 by the International Monetary Fund, while renewed Middle East tensions have been flagged as a key risk to global economic stability. In its July 2026 WEO update, the IMF projected global growth at 3.0% in 2026 and 3.4% in 2027, lower than the 3.5% average recorded in 2024-25. It was warned that conflict-driven uncertainty, energy price pressure and trade disruptions could weigh on global recovery.