ISLAMABAD – Finance Minister Muhammad Aurangzeb on Thursday presented the Pakistan Economic Survey for the fiscal year 2025-26, stating that the country’s GDP growth stood at 3.7 per cent despite significant domestic and global challenges including uncertainity due to tariffs, floods and Iran-US war in the Middle East.
The finance minister said the growth rate, although affected by various pressures, remained higher compared to the past two to three years. He added that the government had initially expected GDP growth to exceed 4 per cent. He made these remarks while presenting Economic Survey for Fiscal Year-2025-26 in Islamabad. Federal Minister for Planning and Development Ahsan Iqbal, Federal Minister Attaullah Tarar and others were also present there.
Aurangzeb said the outgoing fiscal year was marked by several disruptions, including global trade uncertainty, severe flooding, and regional geopolitical tensions. He said these three major factors significantly impacted economic activity.
“Despite these challenges, Pakistan demonstrated resilience and continued its journey from stabilization towards growth,” he remarked.
According to the Economic Survey 2025-26, agriculture posted growth of 2.98 per cent during the fiscal year, despite flood-related losses. The livestock sector contributed around 6 per cent growth within the agriculture segment.
The finance minister said the industrial and manufacturing sectors also performed relatively better during FY 2025-26, contributing positively to overall economic activity.
Muhammad Aurangzeb said Pakistan’s economy demonstrated resilience and improved performance during fiscal year 2025-26 despite global headwinds, including tariff-related uncertainty triggered by the United States and heightened geopolitical tensions in the Middle East.
He noted that these external shocks contributed to volatility in the global economic environment; however, Pakistan managed to maintain stability and deliver better-than-expected economic outcomes.
The finance minister said the country recorded GDP growth of 3.7 per cent during FY2025-26. He added that, given prevailing global uncertainty, the government had initially projected growth above 4 per cent, which could have been achieved in the absence of regional disruptions.
Referring to the Middle East situation, Aurangzeb said Pakistan’s economic momentum remained intact despite the regional crisis, which also weighed on global markets.
He said the size of the national economy expanded to $452.1 billion during the fiscal year, while per capita income rose from $1,751 to $1,901.
Sectoral performance shows broad improvement
Providing sector-wise details, the minister said the cement sector posted 10 per cent growth, fertiliser output increased by 17 per cent, and the petroleum sector grew by 5 per cent. He added that the services sector recorded growth of 4.9 per cent.
He said positive trends were observed in 16 sectors, including food and textiles, while 16 out of 22 manufacturing industries showed improvement during the year. He also highlighted the expanding role of the digital economy in driving demand and supporting overall economic activity.
External and fiscal stability indicators improve
Aurangzeb said Pakistan’s current account remained in surplus of $72 million during the July–March period. He added that fiscal discipline helped strengthen macroeconomic stability, with the fiscal deficit contained at 0.7 per cent and the primary balance remaining in surplus. The primary surplus stood at 3.2 per cent of GDP during the same period.
Inflation, he said, declined significantly compared to previous highs, averaging 6.7 per cent during July–May. Federal Board of Revenue (FBR) revenues rose by 10.1 per cent, while remittances also showed strong growth.
Foreign exchange reserves stood at around $17.1 billion and were expected to reach $18 billion by the end of June. As of May 29, reserves were recorded at $17.2 billion, marking a 49 per cent increase year-on-year. Import cover improved to 2.75 months.
Record remittances and financial sector growth
Overseas Pakistanis sent a record $33.9 billion in remittances during July–May, with a monthly high of $4.3 billion recorded in April 2026. The minister thanked overseas Pakistanis for their continued support, noting their crucial role in stabilising the economy.
IT and technology-related exports reached $3.8 billion during July–April, while freelancers contributed $959 million, nearing the $1 billion mark. Deposits under the Roshan Digital Account rose to $12.7 billion.
The Pakistan Stock Exchange’s investor base crossed 563,000, with 11 new companies listed during the year. More than 39,000 new companies were registered, taking the total to over 297,000.
Private sector credit increased by Rs934 billion during July–March, while agricultural financing reached Rs2.162 trillion.
Social protection and structural reforms
The finance minister said the budget for the Benazir Income Support Programme (BISP) had been raised to Rs722.5 billion to support low-income households.
He added that the government has accelerated privatisation efforts involving entities such as Pakistan International Airlines (PIA), First Women Bank Limited (FWBL) and power distribution companies.
Aurangzeb further said a rightsizing initiative is underway, including the merger of ministries and closure of several departments, including the Pakistan Public Works Department (PWD).
