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Monthly development update: Economy stays on stabilisation, recovery path in July-Jan FY26

Published February 10, 2026 Updated February 10, 2026 09:19am

3 min

By Naveed Butt

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ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal said that Pakistan’s economy continued on a path of stabilization and recovery during July–January of fiscal year 2025–26, as easing inflation, rising industrial output, and stronger fiscal and external indicators signalled renewed momentum and growing investor confidence.

Addressing a news conference on monthly development update of February 2026, the minister said that inflation slowed to 5.2 percent during the period, offering relief to households and businesses, while Large-Scale Manufacturing (LSM) recorded a robust 6.0 percent growth, reflecting improved industrial activity and demand conditions.

He said that fiscal performance also showed marked improvement, with the Federal Board of Revenue (FBR) collecting Rs. 7.2 trillion in revenues, strengthening the government’s financial position.

He said that overseas Pakistanis remitted US$ 19.7 billion, providing vital support to the external sector and helping stabilize foreign exchange flows.

Speaking about ongoing development spending, the minister said the Industries and Production sector has been allocated Rs. 6.760 billion under the current PSDP, representing about one percent of the total development outlay. Of this amount, Rs 3.894 billion has been earmarked for the food and agriculture sector, while Rs 2.866 billion has been allocated for industrial projects, he said.

He informed that so far Rs. 1.08 billion has been spent in the food and agriculture sector, while the industries sector has utilized Rs. 0.514 billion, reflecting steady progress on key initiatives aimed at boosting productivity, value addition, and employment.

Ahsan Iqbal said special focus is also being placed on underdeveloped regions to ensure inclusive growth. He noted that Special Areas including Azad Jammu and Kashmir and Gilgit-Baltistan have been allocated Rs. 81.800 billion, accounting for eight percent of the PSDP, while the merged districts of Khyber Pakhtunkhwa have received Rs. 65.444 billion to accelerate socio-economic uplift.

To ensure effective implementation of development initiatives in the Merged Districts, the minister said a Joint Steering Committee has been constituted under the Chief Minister of Khyber Pakhtunkhwa with federal representation to oversee the Accelerated Implementation Program (AIP).

“These investments reflect our commitment to bridging regional disparities, strengthening industry, and building a resilient economy that delivers opportunities to every corner of Pakistan,” Ahsan Iqbal said.

He said the Central Development Working Party (CDWP) approved two education projects worth Rs. 5.84 billion to establish Danish Schools in Balochistan and Gilgit-Baltistan to provide quality education aligned with international standards. In the governance sector, two projects costing Rs. 3,802 million were approved to enhance institutional capacity and update the reference year for national economic accounts in line with structural changes in the economy.

The minister said CDWP reviewed five health sector projects, approving three schemes worth Rs. 12.524 billion, while two major projects costing Rs. 56.823 billion were recommended to ECNEC. These initiatives cover expanded health insurance, new tertiary hospitals, stronger disease surveillance and upgraded cardiology services, he said. He said that the CDWP also recommended a manpower development project costing Rs. 25.172 billion to ECNEC aimed at equipping youth with employable skills.

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