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ISLAMABAD, Jun 10 (APP):The country’s economic outlook is anchored by a targeted GDP growth of 4.2 percent for the fiscal year 2025-26 (FY26) while the agricultural sector is set to achieve growth of 4.5 percent, driven by government initiatives under the URAAN Pakistan framework, improved input availability, and gradual adaptation to challenging climatic conditions.
According to the budgetary document Annual Plan 2025-26, the industrial sector aims to sustain its growth momentum with a target of 4.3 percent, supported by a projected 3.5 percent expansion in Large-Scale manufacturing (LSM), positive growth of 3.0 percent in mining and quarrying, and a resilient construction sector.
The services sector is targeted to expand by 4.0 percent, propelled by increased economic activity in commodity-producing sectors. Total investment is targeted at 14.7 percent of GDP, underpinned by continued fiscal discipline, monetary easing, and structural reforms, while national savings are targeted at 14.3 percent of GDP.
During FY2024-25, the document said that Pakistan’s economy exhibited sustained progress, underpinned by prudent macroeconomic management, enhanced fiscal and external sector stability, and robust inflation containment strategies. This macroeconomic steadiness was maintained despite challenges posed by a sluggish global recovery and escalating
international trade tensions. The Gross Domestic Product (GDP) growth for the fiscal year stood at 2.7 percent, marking a modest increase from 2.5 percent recorded in FY2023-24.
Sectoral performance reflected a heterogeneous pattern, agriculture growth moderated to 0.6 percent from 6.4 percent in the preceding year, the industrial sector demonstrated a notable recovery with a growth rate of 4.8 percent, reversing a
contraction of 1.4 percent and the services sector expanded by 2.9 percent, improving on the previous year’s 2.2 percent. These sectoral dynamics underscore varied levels of resilience and gradual recovery amid ongoing macroeconomic stabilization efforts.
Furthermore, national savings as a percentage of GDP increased to 14.1 percent in FY2024-25 from 12.6 percent in the prior year, while total investment rose to 13.8 percent of GDP compared to 13.1 percent, reflecting strengthened domestic financial mobilization.
It added that Pakistan’s external sector demonstrated marked resilience and improvement during FY2024-25. Robust export earnings of US$ 27.3 billion and record remittances totaling US$ 31.2 billion, despite an uptick in imports, culminated in a current account surplus of US$1.9 billion for the period July–April FY2024-25, a significant turnaround from the US$ 1.3 billion deficit recorded in the corresponding period of the previous year.
This improvement was supported by a tight monetary policy, enhanced fiscal management, and continued inflows under the IMF Extended Fund Facility, which collectively bolstered foreign exchange reserves to US$ 16.6 billion as of 31 May 2025 (comprising US$ 11.5 billion held by the State Bank of Pakistan and US$ 5.1 billion in commercial bank reserves), thereby stabilizing the exchange rate. Additionally, net inward foreign direct investment (FDI) inflows reached US$ 1.9 billion during July-April FY2024-25.
Building on this positive momentum, the Annual Plan 2025–26, in alignment with the URAAN Pakistan strategy, sets ambitious targets to further augment foreign exchange earnings by elevating exports, remittances, and FDI. Central to this effort is the export led 5Es Framework, which focuses on diversification, enhancing competitiveness, fostering innovation, supporting small and medium enterprises (SMEs), and promoting cluster development to strengthen domestic brands of locally manufactured goods.
Through implementing these comprehensive strategies, Pakistan aims to achieve sustainable economic growth while enhancing its resilience against external vulnerabilities and global economic shocks.