KARACHI, October 8, 2025 — The State Bank of Pakistan (SBP) is expected to maintain its Pakistan interest rate in October 2025 during the upcoming monetary policy announcement on October 27, 2025, as inflationary pressures and ongoing IMF negotiations cast uncertainty over the economic outlook.
In an interview with Bloomberg, SBP Governor Jamil Ahmed stated that the likelihood of an interest rate cut is minimal this month. “Any shift in the policy rate will hinge on the outcome of IMF talks and the economic impact of recent floods,” he said.
Inflation in Pakistan surged from 3% to 5.6% in September, mainly due to flood-related disruptions, dampening earlier expectations of monetary easing and Pakistan’s interest rate in October 2025. Governor Ahmed noted that while inflation may temporarily exceed the SBP’s medium-term target of 5–7% in early 2026, it is expected to average within this range over the current and next fiscal year.
Pakistan’s Growth Outlook: A Prolonged Period of Stagnation
The World Bank’s latest Pakistan Development Update has revised down the FY25-26 growth forecast to just 2.6%, compared to the government’s more optimistic projection of around 4%.
This comes after three years of… pic.twitter.com/7bno1IYLJe
— Asad Ali Shah (@Asad_Ashah) October 8, 2025
The SBP’s Monetary Policy Committee had kept the interest rate unchanged in its previous meeting, reflecting a cautious stance despite relative stability since May 2025.
Meanwhile, Pakistan’s economic outlook remains constrained. The World Bank recently projected a modest GDP growth rate of 2.6% for FY2026, citing structural challenges and the slow pace of reforms.
پاکستان کا بینچ مارک کے ایس ای-100 انڈیکس بھی نمایاں طور پر بہتر ہوا، جو جولائی میں 11 فیصد اور ستمبر میں 11.4 فیصد بڑھا، سرمایہ کاروں کے اعتماد میں اضافہ مئی میں بھارت کے ساتھ فوجی تنازع کے خاتمے اور امریکا کے ساتھ پاکستان کے بڑھتے ہوئے سفارتی تعلقات کے باعث ہوا۔… pic.twitter.com/Pnogy9FLf3
— DawnNews (@Dawn_News) October 8, 2025
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On the trade front, Ahmed highlighted growing U.S. interest in Pakistani textiles amid high tariffs on Indian goods. However, exporters remain concerned about Pakistan’s competitiveness due to rising domestic production and energy costs.
“Policy support is essential for exporters to fully capitalize on evolving global trade dynamics,” the SBP Governor added.
