Monthly Development Report: FY27 GDP growth target set at 4pc
ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal has said that workers’ remittances increased by 8.6 percent to USD 41.6 billion in financial year 2025-26, compared with USD 38.3 billion a year earlier.
“Pakistan has set a 4 percent GDP growth target for fiscal year 2026-27 after the economy expanded by 3.7 percent in FY2025-26, up from 3.2 percent a year earlier. Inflation averaged 7.1 percent, below the official target of 7.5 percent. Total exports of goods and services reached USD 40.9 billion, while services exports increased 18.7 percent to USD 10 billion from USD 8.5 billion,” the minister said while launching the Monthly Development Report for July 2026 at a press conference on Thursday.
He further informed that the current account deficit remained contained at USD 139 million despite higher imports and global economic uncertainty. The government aims to increase Pakistan’s exports to USD 63 billion by 2029. It is strengthening partnerships with the private sector and introducing structural reforms to enhance the country’s global competitiveness.
While unveiling the development strategy for FY2026-27, the minister said the agriculture sector grew 2.9 percent, services expanded 4.1 percent, and the industrial sector recorded 3.5 percent growth during FY2025-26, reflecting a broad-based economic recovery.
He said average inflation remained contained at 7.1 percent during FY2025-26, staying within the annual target of 7.5 percent. Inflationary pressures eased towards the end of FY2025-26, with year-on-year (YoY) inflation declining to 11.1 percent in June 2026 from 11.7 percent in May 2026.
The minister said Large-Scale Manufacturing (LSM) recorded a growth of 5.8 percent during July-May FY2025-26, compared with a contraction of 1.12 percent during the corresponding period of the previous year, reflecting a significant improvement in industrial activity. He said the growth was broad-based, led by automobiles (58.8 percent), electrical equipment (13.5 percent), tobacco (12.8 percent), food (7.8 percent), non-metallic mineral products (6.3 percent), beverages (5.4 percent) and wearing apparel (7.3 percent), among others, contributing to the overall expansion of the manufacturing sector.
The minister said the Federal Board of Revenue (FBR) collected Rs13 trillion in taxes during FY2025-26, up 10.8 percent from Rs11.7 trillion a year earlier. He said the government has set a revenue collection target of more than Rs15.2 trillion for FY2026-27.
Highlighting development planning, he said the Central Development Working Party (CDWP) held 21 meetings during FY2025-26, reviewing 330 development agenda items. The forum approved 192 agenda items and referred 96 projects to the Executive Committee of the National Economic Council (ECNEC) for final approval. In June alone, the CDWP held three meetings, considered 72 agenda items, approved 49 proposals and forwarded 21 projects to ECNEC.
Iqbal said development projects approved during FY2025-26 are expected to generate approximately 289,000 direct and 424,000 indirect jobs. He added that financial and economic reviews of development schemes resulted in savings of Rs12.6 billion for the national exchequer.
The minister said achieving the 4 percent growth target would require avoiding the fiscal and external imbalances experienced in the past while strengthening the role of the private sector in driving sustainable economic growth.
He said the government’s priorities for FY2026-27 include protecting purchasing power, reducing poverty, supporting vulnerable segments of society and creating employment opportunities, particularly for young people through entrepreneurship and skills development.
The minister said authorities would ensure strict implementation of oil price notifications issued by the Oil and Gas Regulatory Authority (OGRA), crack down on fake notifications, profiteering and hoarding, prevent unjustified increases in transport and freight charges, and ensure uninterrupted supplies of petroleum products.
He said universities have been directed to comprehensively review their curricula to align higher education with the requirements of the Fourth and Fifth Industrial Revolutions. He added that new degree programmes focused on future skills would be introduced, while teachers’ professional development would also be strengthened.
The minister said that during his recent visit to the United States, the University of Illinois expressed interest in establishing a campus in Pakistan.
He said adjustments in petroleum prices are necessary to preserve fiscal discipline and economic balance and are directly linked to fluctuations in global oil prices. He added that if international oil prices decline, the government is committed to passing the benefit on to consumers.
Copyright Business Recorder, 2026