Global rating agency S&P Global Market Intelligence has released fresh projections for Pakistan’s economy, forecasting controlled inflation and moderate growth over the next two years, alongside concerns over a rising current account deficit.

According to S&P Global Market Intelligence, Pakistan’s inflation rate is expected to stand at 5.1% this year. The agency forecasts a slight increase to 5.6% next year, indicating relative price stability compared to previous years.

The report suggests that inflationary pressures are easing and are likely to remain manageable in the near term.

Current account deficit likely to widen

S&P Global expressed concern that Pakistan’s current account deficit may increase. It is projected to rise from 0.5% of GDP to 1.3%, reflecting continued external sector pressures.

Despite this, the deficit is expected to remain within a manageable range.

The agency forecast Pakistan’s real GDP growth at 3.5% in the current fiscal year. For the following year, economic growth is expected to improve further, reaching around 4.4%.

S&P Global Market Intelligence (S&P) has released its latest macroeconomic forecast for Pakistan, offering an updated view on inflation, the current account, and growth, which can be compared with the State Bank of Pakistan’s (SBP's) latest projections.

1) Inflation outlook…
— Khurram Schehzad (@kschehzad) January 27, 2026

These projections point to a gradual recovery in economic activity.

Adviser welcomes report

Advisor to the Federal Finance Minister Khurram Shahzad welcomed the report in a message posted on X. He said there is broad alignment between the forecasts of S&P Global and the State Bank of Pakistan.

Khurram Shahzad noted that both institutions agree on improving economic conditions and declining inflation.

According to Khurram Shahzad, the State Bank of Pakistan has projected inflation between 5 and 7% for the next two years.
The central bank estimates the current account deficit at 0 to 1% of GDP in the current fiscal year.

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The State Bank has also forecast a higher economic growth range of 4.5 to 5.5%.

Signs of gradual improvement

Shahzad said the reduction in inflation and gradual improvement in economic indicators reflect a joint assessment by both S&P and the State Bank.

“Pakistan’s economy is gradually improving,” he said, citing growing stability and easing price pressures.

While the forecasts highlight ongoing challenges such as the current account deficit, both domestic and international institutions see improving stability and controlled inflation.