Karachi – February 26, 2026: Pakistan’s economy displayed signs of cautious stabilization during the Oct–Dec 2025 quarter of FY2026, yet fiscal and trade pressures continued to weigh on growth, investor confidence, and household budgets. The Federal Board of Revenue (FBR) fell short of its quarterly target, collecting Rs. 3,274 billion against a target of Rs. 3,467 billion — a shortfall of Rs. 193 billion — with all three months recording revenue deficits. Exports during the same quarter lagged at $7.66 billion, while imports surged to $15.84 billion, widening the trade gap and contributing to a current account deficit of $458 million, despite a brief surplus of $98 million in Nov-25. In this context, ICMA Research and Publications Department has released its latest “Economic Infographics: A Snapshot of Pakistan’s Economy” providing a comprehensive view of the country’s macroeconomic performance during the Oct–Dec 2025 Quarter of FY2026.
Despite these pressures, some indicators signaled cautious optimism. Workers’ remittances during the Oct–Dec 2025 quarter of FY2026 provided a vital lifeline, totaling $10.2 billion, with Saudi Arabia, the UAE, and the UK contributing $2.4 billion, $2.1 billion, and $1.54 billion respectively. Foreign exchange reserves rebounded, with the State Bank’s holdings climbing from $14.5 billion in October to $16.1 billion in December, while commercial bank reserves inched up to $4.7 billion. For ordinary households, inflation finally offered relief: the Consumer Price Index dipped from 1.7 percent in October to -0.4 percent in December, and the Sensitive Price Index improved from 0.9 percent to -0.8 percent, easing pressure on monthly budgets.
Credit conditions also strengthened. Private sector credit expanded to Rs. 10.93 trillion in December from Rs. 9.95 trillion in October, while government borrowing declined from Rs. 2,796.8 billion to Rs. 2,310.6 billion, easing crowding-out pressures and signaling renewed confidence in commercial activity.
Financial markets reflected cautious optimism, with the KSE-100 index surging from 161,632 points in October to 174,054 points in December, pushing market capitalization from Rs. 18,561 billion to Rs. 19,689 billion. The rupee held firm at Rs. 283/USD, gold prices surged from Rs. 363,529 to Rs. 394,376 per 10 grams, and petrol prices remained largely stable at Rs. 263/L before easing to Rs. 258.17/L by mid-February 2026.
Corporate Pakistan remained dynamic, with 10,421 new companies registered during the Oct–Dec 2025 quarter of FY2026, bringing the total to 279,724. The cement sector dispatched 13.24 million tons during the same quarter, including 2.04 million tons for export, while the automotive industry produced 38,805 passenger cars, with monthly output moderating from 15,112 units in October to 10,735 units in December. Funds held in Roshan Digital Accounts rose from $11.31 billion to $11.71 billion during the Oct–Dec 2025 quarter of FY2026, reflecting continued confidence from the Pakistani diaspora.
Government debt showed a mixed picture. Domestic debt rose from Rs. 53.96 trillion to Rs. 55.36 trillion, while external debt inched up to Rs. 23.17 trillion. Foreign grants and loans during the Oct–Dec 2025 quarter of FY2026 bolstered external support, led by Saudi Arabia’s $302.31 million via the Saudi Fund for Development (oil facility) and China’s $198.35 million in bilateral support.
ICMA projects GDP growth of around 3.5 percent for FY2025–26, in line with forecasts from the IMF, World Bank, UN, ADB, and Moody’s, while the State Bank expects a slightly higher range of 3.75–4.75 percent.
The review paints a picture of an economy gradually stabilizing yet still shadowed by structural pressures. Persistent fiscal gaps, widening trade deficits, revenue shortfalls, and inflation pressures underline the urgent need for tax reforms, export promotion, and disciplined macroeconomic management to sustain growth and strengthen resilience.
