ISLAMABAD, Oct 01 (APP):Pakistan’s economy continued to consolidate gains from macroeconomic stabilization during the first two months of FY2027, with recovery broadening across productive sectors, stronger external buffers, improved revenue collection and continued support for households and productive activities. According to the September 2026 Monthly Economic Update and Outlook issued by the Finance Division on Wednesday, manufacturing activity strengthened, supported by higher vehicle production and sales, increased domestic cement dispatches …
Govt. measures broaden economic recovery, strengthen stability
ISLAMABAD, Oct 01 (APP):Pakistan’s economy continued to consolidate gains from macroeconomic stabilization during the first two months of FY2027, with recovery broadening across productive sectors, stronger external buffers, improved revenue collection and continued support for households and productive activities.
According to the September 2026 Monthly Economic Update and Outlook issued by the Finance Division on Wednesday, manufacturing activity strengthened, supported by higher vehicle production and sales, increased domestic cement dispatches and growth in several large-scale industries, while early agriculture indicators remained encouraging.
Large-scale manufacturing output increased 3.03 per cent year-on-year in July 2026, with automobile production surging 57 per cent, wearing apparel 22 per cent and tobacco 35.8 per cent. Vehicle production and sales also rose 27.6 per cent and 29.9 per cent, respectively, during July-August FY2027.
Agricultural financing provided further support, with agricultural credit disbursements increasing 16.4 per cent to Rs271.9 billion in July FY2027 from Rs233.7 billion a year earlier. Tractor sales also grew 4.7 per cent during July-August.
The external sector showed significant improvement, with the current account deficit narrowing to $543 million during July-August from $853 million in the corresponding period last year. Workers’ remittances increased 14.7 per cent to $7.29 billion, while services exports grew 28.8 per cent to $1.81 billion.
Foreign investment inflows rose 80.2 per cent to $562.2 million, including a 24 per cent increase in foreign direct investment to $494.5 million. The $3 billion Eurobond issuance in September also boosted the country’s reserve position, with total liquid foreign exchange reserves reaching $26.8 billion on September 18.
Fiscal consolidation also continued, with FBR net tax collection rising 3.7 per cent to Rs1,722.4 billion during July-August FY2027. The consolidated primary balance remained in surplus at Rs196.3 billion, indicating that revenues continued to cover non-interest expenditures.
The government also continued measures to protect vulnerable households and maintain fiscal discipline amid higher global oil prices.
The Prime Minister’s Fuel Relief Scheme provides targeted assistance to lower-income households through digital delivery, while austerity and fuel-conservation measures include a 50 per cent cut in fuel for official vehicles on non-operational duties, restrictions on official travel and a ban on new vehicle and durable goods purchases.
The update said wider access to agricultural lending, affordable housing finance, livelihoods support and overseas employment opportunities was reinforcing the benefits of stabilization and creating broader economic opportunities.
The government’s continued emphasis on productive investment, financial inclusion, revenue mobilization and expenditure discipline, it added, was helping strengthen the foundation for inclusive and durable economic growth.
