Key indicators show strong growth as Pakistan moves towards economic transformation: Ahsan Iqbal

Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal said that Pakistan’s economy had entered a phase of greater stability, but stressed that the next priority was to translate macroeconomic stability into sustainable economic transformation under URAAN Pakistan.

While presenting the Monthly Development Update of August, the minister said that the report is part of the Government’s commitment to regularly present a clear and transparent picture of the country’s economic position, progress achieved and challenges requiring continued attention, read a statement on Saturday.

He said Pakistan had passed through a difficult period of economic adjustment and that the stability achieved over the past few years had been hard-earned.

“Through URAAN Pakistan, our focus is now to translate this stability into sustainable economic transformation, with exports as a key driver, leading to more jobs, better incomes, greater opportunities for our youth and an improved quality of life for the people of Pakistan,” he said.

He said that the beginning of FY2026-27 has provided encouraging economic signals. Consumer Price Index (CPI) inflation eased to 9.2% in July 2026, compared with 11.7% in May 2026. The moderation indicates that price pressures have begun to ease, while the year-on-year increase from 4.1% largely reflects the base effect and the pass-through of global food and energy prices.

The minister said that the government is continuously monitoring markets and prices through regular meetings of the National Price Monitoring Committee (NPMC), with particular emphasis on strengthening supply chains, monitoring the quality of essential commodities and taking timely administrative measures to keep essential items affordable.

Workers’ remittances remained a major source of external-sector resilience, reaching $3.6 billion in July 2026, an increase of 13% from $3.2 billion in July 2025.

This strong beginning to FY2026-27 follows record remittances of US$41.6 billion during the previous fiscal year. He said that the inflows not only strengthen Pakistan’s foreign exchange position but also directly support millions of Pakistani households and reflect the continued contribution of overseas Pakistanis to the national economy.

Industrial activity also showed a significant recovery. Large-Scale Manufacturing (LSM) recorded average growth of 5.0% in FY2025-26, compared with a contraction of 0.7% in the previous year.

The external sector also started FY2026-27 on an encouraging note. Goods exports increased by 9.4% to $3 billion in July 2026, compared with $2.8 billion in July 2025. Total exports of goods and services rose by 13% to $3.9 billion from $3.5 billion during the same month a year earlier.

He said imports of goods and services also increased by 13% to $7.3 billion in July 2026 from $6.5 billion in July 2025, reflecting strengthening domestic economic activity and higher demand for productive and capital goods.

Despite the increase in imports, the current account deficit remained contained at $328 million in July 2026, compared with $529 million in July 2025, demonstrating continued resilience in Pakistan’s external position amid global uncertainties.

Iqbal said that fiscal consolidation remained a key pillar of the economic reform agenda. Federal Board of Revenue (FBR) tax collection increased by 8.4% to Rs820.9 billion in July FY2026-27, compared with Rs757.4 billion in the corresponding month of the previous year.

Stronger fiscal discipline also improved the overall fiscal position. The fiscal deficit narrowed to 2.6% of GDP in FY2025-26, compared with 5.4% in FY2024-25, marking the lowest fiscal deficit recorded in two decades, says Ahsan Iqbal.

Under the Finance Division’s release strategy, which provides for releases of 15% in Q1, 20% in Q2, 25% in Q3 and 40% in Q4, the Ministry of Planning authorised Rs211.327 billion, equivalent to 21.1%, during July 2026.

The minister said that the Central Development Working Party (CDWP) continued to play an important role in improving the quality and prioritisation of public investment decisions.

During July FY2026-27, the forum considered 27 agenda items, comprising 22 projects, four position papers and one concept clearance proposal. Of these, nine projects, three position papers and one concept clearance proposal were approved, while nine projects were recommended to the Executive Committee of the National Economic Council (ECNEC).

He said that projects approved during July 2026 are expected to generate approximately 7,851 direct and 14,053 indirect jobs across key sectors, reinforcing the Government’s commitment to employment-oriented, inclusive and sustainable development.

He shared that a comprehensive review of CDWP projects led to the streamlining of non-essential project components, resulting in savings of Rs1.02 billion during July 2026 and ensuring that scarce public resources are redirected towards higher-impact development priorities.

During July 2026, five PSDP projects were monitored, and two projects were evaluated to assess implementation progress, efficiency, impact and sustainability.