Global geopolitical tensions, domestic security risks, commodity price volatility, natural disasters, and cybersecurity threats have been identified as the five most significant risks facing Pakistan’s financial system, according to the State Bank of Pakistan’s latest Systemic Risk Survey published in the Financial Stability Review 2025. The findings are based on data collected in January 2026 as part of SBP’s 17th biannual survey, which captures sentiment from senior banking executives, non bank financial institutions, and financial journalists regarding present and near term risks over the next six months.
The survey indicates that among all risk categories, global geopolitical developments remain the most dominant concern, shaping overall perceptions of systemic risk within the financial sector. Respondents expect geopolitical risks to remain elevated in the short term, while concerns linked to commodity price fluctuations, natural disasters, and cybersecurity threats are projected to ease slightly in the coming months. Despite this outlook, the presence of multiple overlapping external and internal risk factors continues to influence overall stability assessments across financial institutions operating in Pakistan.
Domestic security conditions also remain part of the risk landscape, with domestic terrorism highlighted as a factor expected to persist in the short term. Although this category does not dominate overall risk rankings, it continues to contribute to the broader assessment of vulnerabilities within the financial system. At the same time, survey participants expressed strong confidence in the resilience of Pakistan’s banking sector, indicating trust in the ability of financial regulators to manage emerging risks and maintain stability across the system even under uncertain conditions.
The Systemic Risk Survey evaluates sentiment across five key areas including global risks, macroeconomic conditions, financial markets, institutional stability, and general risk perception. This structured framework is used to assess how different categories of risk influence overall confidence in the financial system. Compared with the previous survey cycle, overall risk perception showed improvement across most categories, suggesting a more stable outlook in certain areas of the financial ecosystem. However, macroeconomic risk perceptions deteriorated during the reporting period, primarily driven by heightened global geopolitical uncertainty and its impact on economic forecasting.
While external shocks remain a key concern, market participants continue to view Pakistan’s financial system as fundamentally stable and capable of withstanding short term pressures. The survey reflects a mixed outlook where confidence in institutional resilience coexists with awareness of evolving global and domestic challenges. Cybersecurity risks, in particular, remain part of the broader threat environment as digital financial systems expand, reinforcing the need for continued monitoring of technological vulnerabilities alongside traditional economic risks. The overall findings suggest that while risks are present across multiple dimensions, the financial sector maintains a measured level of confidence in its ability to manage and absorb shocks within the current operating environment.
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