Pakistan’s financial system is facing pressure from five key risk areas, with global geopolitical instability emerging as the most significant threat, according to the State Bank of Pakistan’s latest Systemic Risk Survey included in the Financial Stability Review 2025.
The survey highlights global geopolitical tensions, domestic security challenges, commodity price fluctuations, natural disasters, and cybersecurity risks as the most serious vulnerabilities for the financial sector.
Conducted in January 2026 as part of SBP’s 17th biannual assessment, the survey reflects feedback from senior bankers, non-bank financial institutions, and financial journalists on risks expected over the next six months.
Among all categories, respondents identified global geopolitical instability as the leading driver of overall risk perception. It is expected to remain elevated in the near term, influencing broader economic sentiment.
At the same time, concerns linked to commodity price volatility, climate-related disasters, and cyber threats are projected to ease slightly in the coming months, according to participant responses.
Domestic security risks, including terrorism-related concerns, were also flagged as persistent challenges in the short-term outlook.
Despite these risks, the survey shows strong confidence in Pakistan’s financial sector stability. Market participants expressed trust in regulatory institutions and their ability to manage emerging shocks effectively.
The assessment categorizes risks into five broad areas—global, macroeconomic, financial markets, institutional, and general risk indicators—to gauge overall financial system resilience.
Compared to the previous round, overall risk sentiment has improved across most categories. However, macroeconomic risk perception has worsened, largely due to rising global uncertainty and geopolitical tensions.
While external shocks remain a key concern, respondents still view Pakistan’s financial system as broadly stable and capable of absorbing near-term pressures under current regulatory frameworks.
