27.07.202611:38:54UTC+00Pakistan Central Bank Holds Policy Rate at 11.5%

The State Bank of Pakistan kept its benchmark policy rate unchanged at 11.5% at its July 27, 2026 meeting, marking a second consecutive pause as policymakers pointed to an improving macroeconomic outlook. Headline inflation slowed to 11.1% in June from 11.7% in May, driven by lower global energy prices and favorable adjustments in electricity tariffs. Economic growth eased to 4.0% in the first quarter of 2026, pressured by the conflict in the Middle East and the associated increase in global energy costs. Looking ahead, the central bank expects stronger performance in commodity-producing sectors to bolster activity in services, with GDP growth in FY2027 projected in the 3.5%–4.5% range. Inflation is projected to gradually decline toward the upper bound of the 5%–7% target band by June 2027. Nonetheless, the outlook remains clouded by uncertainties related to geopolitical tensions, weather patterns—including potential El Niño effects—and the risk of fiscal slippages.