Key Points
- Q1 FY2025-26 GDP grows 3.71%, driven by agriculture, industry, and services
- Large-scale manufacturing expands 5.02% Jul–Oct FY2026; automobile, cement, and textiles lead growth
- Remittances rise 9.3% to $16.1 billion; foreign exchange reserves reach $21 billion
- Fiscal surplus of 1% of GDP achieved; FBR collections up 10.2%
- KSE-100 Index gains 5,046 points, closing at 166,677 in November 2025
ISLAMABAD: Pakistan’s economy maintained steady momentum in the first quarter of FY2025-26, with GDP expanding by 3.71 percent on the back of strong industrial recovery, stable agricultural output, rising remittances, and disciplined fiscal management, according to the Ministry of Finance’s latest Monthly Economic Outlook.
According to the Ministry of Finance’s Monthly Economic Outlook, GDP grew 3.71 per cent in Q1 FY2025-26, with agriculture up by 2.89 per cent, industry 9.38 per cent, and services 2.35 per cent.
Large-scale manufacturing (LSM) registered 5.02 per cent growth during Jul–Oct FY2026, led by textile, apparel, non-metallic minerals, food, electrical equipment, automobile, and cement sectors. The Automobile Sector saw notable gains, with cars up 65.1 per cent, trucks and buses 97 per cent, and jeeps/pick-ups 38.8 per cent. Cement dispatches totalled 21.4 million tonnes, up 11.5 per cent YoY.
Agriculture remained strong, with the government targeting 29.68 million tonnes of wheat for Rabi, 2025-26. Agricultural credit rose 18.6 per cent to Rs 1,097.6 billion Jul–Nov FY2026, while imports of machinery increased 27.3 per cent to $58 million. Urea offtake was 1,170 thousand tonnes (+15.6%), supporting timely Rabi sowing.
Inflation slightly eased, with CPI at 6.1% YoY in November, marginally down from 6.2% in October, while monthly prices increased 0.4%. Major contributors included education (9.0%), health (8.3%), non-perishable food (7.3%), clothing (6.5%), and transport (6.1%).
Fiscal management remained disciplined, yielding a consolidated surplus of 1% of GDP during Jul–Oct FY2026, with FBR collections totalling Rs 4,734 billion, up 10.2 per cent. Direct taxes grew 10.5 per cent, while sales tax, federal excise duty, and customs rose 8.5%, 18.2%, and 10.1%, respectively.
The external sector showed resilience amid higher imports. Exports of goods were $12.8 billion (-3.2%), imports $25.6 billion (+11.1%), resulting in a trade deficit of $12.8 billion. Remittances increased by 9.3 per cent to $16.1 billion, with Saudi Arabia (24.2%) and the UAE (20.8%) leading inflows. Foreign exchange reserves totalled $21 billion, including $15.9 billion with the SBP. IT exports rose 18.5 per cent to $1.8 billion, while net FDI totalled $927.4 million.
The stock market rebounded strongly, with the KSE-100 Index gaining 5,046 points in November to close at 166,677. Market capitalisation increased to Rs 18,866 billion. Monetary policy reflected stable macroeconomic conditions, with the policy rate cut to 10.5 per cent on December 15, 2025.
Social safety programs remained active, with PPAF disbursing Rs 356 million in interest-free loans in November and BISP expenditures reaching Rs 143.5 billion during Jul–Oct FY2026. Overseas employment registrations totalled 349,850 during Jul–Nov, FY2026.
The outlook for Pakistan’s economy remains positive, supported by industrial growth, structural reforms, stable inflation (projected to be 5.5-6.5 per cent in December), and continued remittance inflows, easing external pressures. Fiscal consolidation, enhanced tax collection, and sectoral reforms are expected to maintain macroeconomic stability and long-term growth momentum.
