Pakistan’s economy expanded by 3.7 percent during FY2025-26, according to the Pakistan Economic Survey 2025-26 released by the Ministry of Finance. The latest figures show stronger economic activity, improved fiscal management, and a stable external sector despite global challenges.
The economy grew faster than last year’s 3.18 percent. Growth came from all major sectors, including agriculture, industry, and services. The services sector remained the biggest contributor and recorded growth of 4.09 percent. Meanwhile, industry expanded by 3.51 percent, while agriculture grew by 2.89 percent.
GDP at current market prices increased to Rs126.87 trillion from Rs114.04 trillion a year earlier. At the same time, per capita income rose to $1,901 compared to $1,751 in FY2024-25.
Finance Minister Muhammad Aurangzeb said Pakistan maintained its recovery despite difficult global conditions and the impact of the 2025 monsoon floods. He added that the government continued relief efforts while pushing ahead with economic reforms.
One of the greatest improvements came from the fiscal side. The fiscal deficit narrowed to 0.7 percent of GDP during July-March FY2026. It stood at 2.6 percent during the same period last year. In addition, the primary surplus increased to 3.2 percent of GDP due to better revenue collection and controlled spending.
Government revenues climbed by 10.7 percent to Rs14.8 trillion. Tax revenues also increased by 11.3 percent. Collections by the Federal Board of Revenue crossed Rs9.3 trillion during the period.
The external sector also remained stable. Pakistan posted a current account surplus of $72 million during July-March FY2026. Workers’ remittances reached a record $30.3 billion after growing by more than 8 percent.
Foreign exchange reserves rose to $22.6 billion by mid-May 2026. Of this amount, the State Bank of Pakistan held $17.1 billion. Furthermore, the Pakistani rupee remained largely stable with an average exchange rate of Rs281.1 per US dollar.
Investor confidence also improved during the year. The benchmark KSE-100 Index gained 18.4 percent and increased from 125,627 points to 148,743 points. Market capitalization rose by Rs1.3 trillion and reached Rs16.5 trillion.
Corporate activity remained strong as well. Nearly 32,000 companies were incorporated during the first nine months of FY2026. Most new businesses emerged in the information technology, trading, and services sectors.
Pakistan’s public debt stood at Rs83.3 trillion by March 2026. However, lower interest rates helped reduce debt servicing costs. The government also extended debt maturities and relied mainly on domestic financing. During the fiscal year, Pakistan received $1.2 billion under the IMF Extended Fund Facility and continued reforms under the IMF-supported program.
Looking ahead, the government believes stronger reserves, stable external accounts, and continued reforms will support future growth. It expects private investment and digital transformation to play a key role in sustaining economic momentum during FY2026-27.
