Pakistan records 3.7% growth in Economic Survey 2025–26, says Aurangzeb

ISLAMABAD: Pakistan’s economy recorded a growth rate of 3.7% during the fiscal year 2025-26, according to the Pakistan Economic Survey presented by Finance Minister Muhammad Aurangzeb.

The finance minister said the economy showed resilience despite difficult domestic and global conditions. He added that the government had expected growth to cross 4%, but regional tensions and global challenges affected overall performance.

He said developments linked to regional instability, including tensions involving Iran, along with heavy monsoon rains, disrupted economic activity in several sectors.

Income, inflation and fiscal indicators

The survey shows that per capita income rose to $1,901, while average inflation fell to 6.7%, showing improvement compared to previous high inflation levels.

The primary surplus reached 3.5% of GDP, while tax collection by the Federal Board of Revenue (FBR) rose to Rs11.229 trillion. Non-tax revenue stood at Rs4.633 trillion.

However, the external sector remained under pressure. The current account recorded a $200 million deficit, compared to a surplus last year. Exports fell by 5.4%, while imports increased by 8.5%, widening the trade gap.

Agriculture sector under pressure

Agriculture growth stood at 2.89%, below the target of 4.5%. Major crops showed weak performance, especially cotton and maize.

Wheat, rice, and sugarcane production increased, but maize and cotton output declined. However, several minor crops performed strongly, including chickpeas, potatoes, bananas, mangoes, turmeric, and chilies.

Industrial sector performs better than expected

The industrial sector grew by 6.6%, exceeding its target. Construction also performed well, while services grew slightly above expectations at 4.09%.

Information technology stood out with 7.5% growth, while sectors like wholesale trade, transport, and finance showed weaker performance. Electricity and gas supply recorded a decline of around 10%.

Remittances and external stability improve

Workers’ remittances crossed $33 billion in ten months, providing strong support to the economy. The Roshan Digital Account also continued to attract foreign investment from overseas Pakistanis.

Foreign exchange reserves rose to $17.2 billion, an increase of 49%, while import cover improved to 2.75 months.

IT sector and digital growth

IT exports reached $3.8 billion, while freelancers earned nearly $959 million, showing strong growth in Pakistan’s digital economy.

Officials said rising remittances, stronger reserves, and IT exports have helped improve overall economic stability.

Overall outlook

The survey highlights that Pakistan’s economy is showing gradual recovery with improvements in key indicators. However, challenges remain in agriculture, exports, and the external sector balance.