Pakistan GDP Growth Hits 3.7% in FY26

In a statement released by the Ministry of Finance, Pakistan’s gross domestic product (GDP) grew by 3.7 percent in the fiscal year 2026 (FY26), according to Finance Minister Muhammad Aurangzeb. The figure, published in the annual Economic Survey, marks a significant rebound from the 2.5 percent growth recorded in FY25 and surpasses the 3.2 percent forecast issued by the International Monetary Fund (IMF) earlier this year.

The growth surge is attributed to a combination of factors, including a robust expansion in the services sector, a steady rise in manufacturing output, and a modest uptick in agricultural production. The services sector, which accounts for roughly 55 percent of the economy, expanded by 4.1 percent, driven largely by telecommunications, retail, and financial services. Manufacturing grew by 3.3 percent, buoyed by increased demand for textiles and consumer goods, while agriculture posted a 2.8 percent rise, supported by improved irrigation infrastructure and favorable monsoon conditions.

Inflation, which has been a persistent concern, moderated to 6.2 percent in FY26, down from 7.8 percent in FY25. The central bank’s monetary policy, characterized by a gradual tightening of interest rates, has helped curb price pressures without stifling growth. Fiscal policy has also played a role, with the government implementing targeted subsidies for small and medium enterprises and expanding social safety nets to protect the most vulnerable households.

Looking ahead, the Ministry of Finance has outlined a fiscal roadmap that aims to maintain a balanced budget by the end of FY28, while continuing to invest in infrastructure projects such as the China-Pakistan Economic Corridor (CPEC) and the National Highway Development Program. The government also plans to negotiate a new loan facility with the World Bank to finance renewable energy initiatives, which could further stimulate economic activity.

While the 3.7 percent growth rate is a positive sign, analysts caution that the economy remains exposed to external shocks, including fluctuations in global commodity prices and geopolitical tensions in the region. Nonetheless, the recent rebound provides a stronger foundation for Pakistan to pursue its long‑term development agenda and improve living standards for its population.