Pakistan’s economic managers struck a cautiously optimistic tone on Thursday, even as global uncertainties continue to cloud the outlook. The Ministry of Finance reported a strong primary surplus of 3.3 percent of GDP, yet warned that external risks are rising due to ongoing geopolitical tensions and supply chain disruptions.
At home, the economy has maintained stability. The ministry noted that growth momentum remained intact during the third quarter of fiscal year 2026, supported by improved fiscal discipline and steady performance in key sectors. Meanwhile, tax collection rose by over 10 percent, reflecting gains in both direct and indirect taxes. As a result, the fiscal deficit narrowed sharply, highlighting better expenditure control and reduced borrowing costs.
However, inflation remains a concern. The ministry expects April’s inflation to rise between 8 and 9 percent, up from 7.3 percent in March. Although still within the annual target, higher prices—especially driven by global energy costs—are likely to strain households.
External pressures begin to build
On the other hand, the external sector is also confronted with new problems. There have been uncertainties in the international oil market situation as a result of the continuous Middle Eastern conflict, which can affect logistics and increase import costs. Remittances and IT exports will continue to help, but risks now seem tilted against Pakistan.
Nevertheless, there are encouraging factors. Pakistan saw three months of current account surplus in a row, while major export destinations like the US remain robust. Even domestic production sectors like autos and cement are recovering, indicating rising demand.
In any case, the government believes that the country is well-prepared for another crisis, unlike the previous one. With sound policies and reforms, Pakistan hopes to grow even amid the global downturn.
