ISLAMABAD:
Pakistan’s economic system has entered fiscal yr 2025-26 with constructive momentum, constructing on final yr’s features and setting an optimistic tone for the months forward, supported by a stronger exterior and monetary place, the finance ministry stated in its August replace launched Thursday.
“Pakistan’s economic system began FY2026 with constructive developments from the sustained enhancements in FY2025 and set a promising tone for the months forward,” the Month-to-month Replace and Outlook for August 2025 famous.
The report stated funding facilitation measures, reforms to advertise non-public sector-led progress, easing inflation, and accommodative financial coverage are more likely to reinforce enterprise confidence. A beneficial world setting, stronger demand from buying and selling companions, and Pakistan’s latest commerce take care of the US are anticipated to spice up exports, whereas remittances will assist offset import pressures from tariff rationalisation.
Nonetheless, flood-related damages may add fiscal pressures and disrupt meals provides. Inflation is projected to stay inside 4%-5% in August 2025. CPI inflation was recorded at 4.1% YoY in July, in comparison with 3.2% in June and 11.1% in July 2024. On a month-to-month foundation, inflation rose 2.9% in July, after a 0.2% enhance in June.
The exterior sector carried out properly in July FY2026, with a narrower present account deficit and a secure trade price. The FBR additionally recorded sturdy tax progress. These tendencies spotlight secure macroeconomic foundations, with worldwide credit standing companies upgrading Pakistan’s sovereign outlook on the again of sustained enhancements.
Agricultural credit score disbursement rose 16.3% to Rs. 2,577.3 billion in FY2025, whereas agricultural equipment imports jumped 123.9% to $14.4 million in July. The Massive-Scale Manufacturing sector grew 4.1% YoY in June, although it fell 3.7% month-on-month. For FY2025, LSM output declined 0.74%, in comparison with a 0.78% rise final yr.
The fiscal deficit narrowed to five.4% of GDP in FY2025 from 6.9% in FY2024, the bottom in eight years. The first surplus rose to Rs. 2,719.4 billion (2.4% of GDP), the best in 24 years, supported by restrained non-markup expenditures. Expenditure grew 18% to Rs. 24,165.5 billion, whereas federal PSDP allocations elevated 43.3%. Tax revenues rose 26.2%, and non-tax revenues surged 65.7%.
In July FY2026, FBR’s tax assortment elevated 14.8% to Rs. 757.4 billion. The present account deficit narrowed to $254 million from $348 million final July. Exports rose 16.2% to $2.7 billion, whereas imports grew 11.8% to $5.4 billion.
On July 30, the Financial Coverage Committee saved the coverage price unchanged at 11%, noting a slight uptick within the inflation outlook attributable to increased vitality costs.
