Islamabad: Federal Minister for Planning, Development & Special Initiatives Ahsan Iqbal has announced the completion of a year of the Monthly Development Update as a consistent source of economic and development insights since May 2025. This initiative has promoted transparency, improved public awareness, and ensured the timely release of economic trends to stakeholders.
According to Press Information Department, during the first eight months of the fiscal year 2025-26, Pakistan’s economy showed positive signs, including reduced inflation, a recovery in large-scale manufacturing, a stable exchange rate, record stock market performance, improved Public Sector Development Program (PSDP) utilization, and increased remittances. However, the ongoing conflict in the Middle East presents significant external risks, potentially affecting global oil prices, import costs, inflation, and external sector stability. The International Monetary Fund projects a global growth slowdown to 3.1 percent in 2026, with inflation rising to 4.4 percent.
The Minister reported an average Consumer Price Index (CPI) inflation of 5.5 percent from July to February in FY 2025-26, compared to 5.7 percent the previous year. However, year-on-year inflation increased from 7.3 percent in March 2026 to 10.9 percent in April 2026. In response, the government has enhanced price monitoring through weekly National Price Monitoring Committee meetings, and efforts by federal and provincial governments have brought essential commodity prices closer to pre-conflict levels.
Iqbal noted a 6.5 percent recovery in Large Scale Manufacturing from July to March FY 2025-26, attributed to policy measures like the Prime Minister’s export enhancement package, increased private sector credit, and business reforms. Fifteen out of 22 sectors, including automobiles and food, showed positive growth.
Fiscal performance remained strong, with Federal Board of Revenue revenues reaching Rs. 10.3 trillion from July to April FY 2025-26, a 10.3 percent increase from last year, supported by improved enforcement and economic recovery. Remittances grew by 8.5 percent to $33.9 billion, though the Middle East conflict may pose future risks.
In the external sector, exports of goods and services totaled $30.6 billion, while imports reached $56.3 billion from July to March FY 2025-26. Services exports grew by 17 percent, outpacing imports. The current account remained in surplus for three months, bolstered by remittances and IT exports.
PSDP utilization reached 56.1 percent (Rs. 469.8 billion), up from 40.9 percent the previous year. The Central Development Working Party approved several projects expected to create jobs. Savings of Rs. 12 billion were realized through cost rationalization in development projects.
Pakistan’s estimated economic growth for FY 2025-26 is 3.7 percent, with contributions from agriculture, industry, services, and construction. Wheat, rice, and sugarcane production increased, contributing to an economy size of $452.1 billion and a per capita income of $1,901.
Minister Iqbal emphasized the importance of export-led growth for economic sovereignty, urging the business community to promote Pakistani products globally and stressing collaboration between the government and private sector to strengthen the export-oriented economy.