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 stability was not the final destination and that the next priority was to translate macroeconomic stability into sustainable economic transformation under URAAN Pakistan.
While presenting the Monthly Developlent Update of August the Federal Minister said that the Monthly Development Update is the 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.
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 percent in July 2026, compared with 11.7 percent in May 2026. The moderation indicates that price pressures have begun to ease, while the year-on-year increase from 4.1 percent largely reflects the base effect and the pass-through of global food and energy prices.
Minister said that 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 US$3.6 billion in July 2026, an increase of 13 percent from US$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. 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 percent in FY2025-26, compared with a contraction of 0.7 percent in the previous year. The recovery in industrial production is significant for increasing domestic production, creating employment opportunities and generating exportable surplus.
The LSM recovery was broad-based, with 16 out of 22 sectors recording positive growth. The strongest performance was recorded in automobiles at 57.8 percent, transport equipment at 42.4 percent, electrical equipment at 14.3 percent, tobacco at 12.6 percent and food at 7.0 percent.
The external sector also started FY2026-27 on an encouraging note. Goods exports increased by 9.4 percent to US$3.0 billion in July 2026, compared with US$2.8 billion in July 2025. Total exports of goods and services rose by 13 percent to US$3.9 billion from US$3.5 billion during the same month a year earlier. The increase was supported by growth in key export groups, including surgical goods at 16.3 percent, food at 8.0 percent, leather goods at 7.8 percent and textiles at 3.9 percent.
Information and Communication Technology (ICT) exports continued to strengthen Pakistan’s external earning capacity, rising to US$417 million in July 2026 and highlighting the growing potential of technology and digital services as an important source of export earnings.
He said Imports of goods and services also increased by 13 percent to US$7.3 billion in July 2026 from US$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 US$328 million in July 2026, compared with US$529 million in July 2025, demonstrating continued resilience in Pakistan’s external position amid global uncertainties.
Fiscal consolidation remained a key pillar of the economic reform agenda. Federal Board of Revenue (FBR) tax collection increased by 8.4 percent to Rs. 820.9 billion in July FY2026-27, compared with Rs. 757.4 billion in the corresponding month of the previous year. The improvement reflects continued efforts to strengthen domestic revenue mobilization.
Stronger fiscal discipline also improved the overall fiscal position. The fiscal deficit narrowed to 2.6 percent of GDP in FY2025-26, compared with 5.4 percent in FY2024-25, marking the lowest fiscal deficit recorded in two decades says Ahsan Iqbal.
On the development side, the Government is pursuing a more focused and strategic approach to public investment. In line with the priorities of URAAN Pakistan, development resources are being directed towards high-impact projects capable of delivering greater economic and social returns.
Under the Finance Division’s release strategy, which provides for releases of 15 percent in Q1, 20 percent in Q2, 25 percent in Q3 and 40 percent in Q4, the Ministry of Planning authorized Rs. 211.327 billion, equivalent to 21.1 percent, during July 2026 to ensure timely financing of priority development projects. The underlying principle, the Minister said, was clear: every rupee of public development spending must deliver maximum value for money.
The Minister said that the Central Development Working Party (CDWP) continued to play an important role in improving the quality and prioritization 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).
The decision-making process also reflected greater scrutiny of development proposals. Three projects were deferred, while one project and one position paper were returned to the respective sponsors for further consideration.
Public investment continued to serve as an important engine of growth and employment. 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.
The Government also continued to strengthen efficiency and value for money in public investment. A comprehensive review of CDWP projects led to the streamlining of non-essential project components, resulting in savings of Rs. 1.02 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.
The Minister said that human capital development remained central to Pakistan’s long-term economic transformation. On World Population Day, July 11, 2026, the Government reaffirmed its commitment to addressing the country’s population challenge through greater investment in health, education, skills and women’s empowerment. With Pakistan’s population standing at 254.6 million, strengthening human capital is essential to harnessing the demographic dividend and achieving inclusive and sustained growth under URAAN Pakistan.
On July 28, 2026, the 68th meeting of the National Logistic Board reviewed the operational performance and financial matters of the National Logistics Corporation, as well as regional connectivity initiatives. The meeting focused on expanding transit trade hubs, upgrading border and logistics infrastructure, reducing trade costs and strengthening Pakistan’s position as a regional connectivity and trade hub under the vision of URAAN Pakistan.
On July 29, 2026, the Ministry of Planning launched the 50th issue of Development Advocate Pakistan, titled “A Nation at a Turning Point.” With 67 percent of Pakistan’s population below the age of 30, the publication emphasized policy continuity, evidence-based planning and investment in human capital, including the initiative to train one million youth as “Ambassadors of Social Change” under URAAN Pakistan.
Ahsan Iqbal said the economic indicators at the beginning of FY2026-27 offered encouraging signs, but sustained progress would require continued fiscal discipline, stronger exports, productive investment, human capital development and institutional reforms. He said the Government remained committed to converting economic stability into a durable foundation for inclusive growth, employment creation and improved living standards for the people of Pakistan.
