Pakistan’s economy grew by 3.7% in FY2025–26, falling short of the government’s earlier expectation of crossing the 4% mark, Finance Minister Muhammad Aurangzeb said on Thursday.
He said growth was constrained by global uncertainty, including the Middle East war and trade disruptions linked to new tariff measures by the United States, which weighed on global economic activity.
The minister said Pakistan still delivered a stronger-than-expected performance under difficult conditions and managed to maintain overall macroeconomic stability throughout the year.
Despite missing the higher growth target, the economy expanded to $452.1 billion, while per capita income rose to $1,901 from $1,751.
Sector-wise, cement output grew 10%, fertiliser 17%, and petroleum 5%. Services expanded by 4.9%, while positive growth was recorded in 16 of 22 manufacturing sectors, supported by stronger demand and improved industrial activity.
On the external front, Pakistan posted a current account surplus of $72 million during July–March FY26. Remittances reached a record $33.9 billion, while IT exports climbed to $3.8 billion.
Inflation eased significantly compared to recent years, averaging 6.7% during July–May, while FBR revenues increased by 10.1%.
Foreign exchange reserves stood at around $17.1 billion, with projections of $18 billion by June, and import cover improved to 2.75 months.
Fiscal performance also strengthened, with the deficit at 0.7% of GDP and a primary surplus of 3.2%.
Freelancer exports, Roshan Digital Account inflows, stock market listings, and private sector credit all showed expansion, indicating improving financial activity across key segments.
The government said structural reforms, privatisation efforts, and administrative restructuring are ongoing to sustain economic gains and improve long-term efficiency.
