SBP Chief Projects GDP Growth Between 3.25% and 4.25% – SUCH TV

The State Bank of Pakistan (SBP) has projected GDP growth of 3.25 to 4.25 percent for FY26, citing improvements in key macroeconomic indicators. However, the textile sector has warned that high production costs and policy constraints are affecting its global competitiveness, despite the overall positive economic outlook.

Speaking at the annual meeting of the Pakistan Textile Council (PTC) on Tuesday, SBP Governor Jameel Ahmed highlighted several factors supporting the growth forecast.

These include a current account surplus in FY25, record remittances of $38 billion, and an increase in SBP’s foreign exchange reserves to $14.5 billion, supported by $7.8 billion in interbank market purchases.

He noted that inflation had dropped to 3.2 percent in June 2025, enabling the central bank to cut the policy rate from 22 percent to 11 percent over the year.

Fiscal consolidation, reforms in exchange companies, and stable external debt levels have also contributed to market confidence and overall economic stability.

Despite this optimistic outlook, the textile sector raised concerns about its ability to remain competitive globally.

Industry leaders questioned the growth forecast, particularly the upper bound of 4.25 percent, citing extensive flood damage to key crops, especially cotton, which is vital for the sector.

Floodwaters continue to threaten cotton-producing areas in Sindh.

PTC Chairman Fawad Anwar said that while macroeconomic indicators are improving, exporters are yet to feel any tangible relief.

He highlighted the exclusion of essential raw materials from the Export Facilitation Scheme (EFS) and ongoing structural barriers as major obstacles for the industry.

“The global market is offering Pakistan a once-in-a-decade opportunity, especially after the US imposed a 50pc tariff on Indian textile exports, impacting $16bn worth of shipments,” Anwar said.

“But unless bold policy action is taken now, Pakistan may miss this critical opening.”

He urged the government to urgently restore EFS access, reduce the cost of doing business, and implement long-term measures to help the textile sector capture greater global market share.