Pakistan’s economy expanded by 3.7 percent during fiscal year 2025-26. However, the growth rate remained below the government’s target of 4.2 percent.
The figures emerged in the Pakistan Economic Survey 2025-26 unveiled on Thursday. Consequently, officials highlighted improving economic indicators despite ongoing global challenges.
Finance Minister Muhammad Aurangzeb presented the survey during a press conference in Islamabad. He described the fiscal year as a period marked by resilience and disciplined economic management.
The latest growth rate exceeded last year’s 3.18 percent expansion. Moreover, it represented the strongest economic growth recorded in the past four years.
Economic Recovery Gains Momentum
According to the survey, Pakistan accelerated its economic momentum during FY26. The report attributed the improvement to several supportive factors.
Effective macroeconomic management played a key role in boosting growth. Additionally, better fiscal performance strengthened economic stability throughout the year.
The survey also highlighted growth in the large-scale manufacturing sector. Furthermore, the agriculture sector showed resilience despite the floods experienced in 2025.
Exchange rate stability and reforms under the IMF Extended Fund Facility also contributed. Therefore, economic activity improved across several sectors.
Aurangzeb noted that global growth declined from 3.7 percent to 3.1 percent. Despite this slowdown, Pakistan maintained a positive growth trajectory.
Economy Reaches Record Size
The finance minister recalled recent economic performance trends. Pakistan recorded negative growth of 0.2 percent in FY2023.
Growth improved to 2.6 percent in FY2024 and 3.2 percent in FY2025. Consequently, FY2026 marked the fourth consecutive year of recovery.
Aurangzeb said earlier projections suggested growth could surpass four percent. However, regional tensions and the Middle East conflict affected expectations.
Despite missing the target, Pakistan achieved a historic economic milestone. The country’s economy reached a record size of Rs126.9 trillion.
Meanwhile, per capita income increased significantly during the fiscal year. It rose to $1,901 from $1,751 recorded in FY2025.
