Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, while presenting the September 2026 Monthly Development Update (MDU), said that Pakistan had made significant progress in restoring economic confidence and strengthening the foundations of the economy over the past two and a half years, and now needed to convert its achievements at the global and diplomatic levels into greater internal economic strength.
Addressing the MDU presentation, the Federal Minister said that falling oil prices would help ease inflationary pressures, adding that the recent inflationary challenge was linked significantly to rising international oil prices and was being faced by countries across the world.
He said that Pakistan’s economic indicators had improved considerably over the past four years and the country had achieved successes at the international and diplomatic levels. He stressed that Pakistan now needed to improve its economic indicators further and sustain the momentum of economic recovery.
“We need to convert our global successes into internal strength,” Ahsan Iqbal said, adding that political and social disorder could adversely affect the country’s economic development journey and investor confidence.
The Federal Minister said that political parties needed to ensure that their actions did not serve the interests of external adversaries. He said that Pakistan’s political disputes should be resolved through constitutional and democratic institutions, adding that the Pakistan Muslim League-Nawaz had pursued its political and legal cases in Parliament and the courts and had never conspired against Pakistan.
Ahsan Iqbal said that no one would be allowed to play with Pakistan’s future and emphasised that instability and disorder could undermine the country’s economic development process.
He said that a small group within the Pakistan Tehreek-e-Insaf wanted to create disorder on the streets, adding that attempts to turn Islamabad into a battleground would not serve the national interest. He further said that the cases against the former PTI chairman were corruption-related rather than political, and called upon PTI members and workers to seek answers regarding the corruption allegations from their leadership.
Presenting the September 2026 Monthly Development Update, Ahsan Iqbal said that over the past two and a half years, the government had focused on restoring economic confidence, strengthening the foundations of the economy and creating conditions for Pakistan to move forward with greater resilience.
He said that the progress achieved so far provided confidence to focus more strongly on sustainable growth, investment and opportunities for the people. He emphasised that a people-centric objective remained at the heart of the government’s economic agenda, with the priority being to build a more productive and export-oriented economy by encouraging investment, strengthening industry and enabling Pakistan’s young population to become a driving force for economic growth.
The Federal Minister said that this direction was being pursued through URAAN Pakistan and the government’s wider development agenda. He added that the Monthly Development Update reflected the Ministry of Planning’s commitment to transparent, evidence-based and accountable governance.
Speaking about inflation, Ahsan Iqbal said that price stability remained a key priority because it directly affected household budgets and purchasing power. He said that the government was focused on addressing inflationary pressures, particularly in essential goods and services, alongside efforts to achieve higher GDP growth and generate employment.
He noted that average CPI inflation during July-August 2026 stood at 10.2 percent compared with 3.6 percent during the corresponding period last year. Monthly inflation increased to 11.1 percent in August 2026, compared with 9.2 percent in July 2026 and 3.1 percent in August 2025. Food and non-alcoholic beverages recorded inflation of 13.9 percent, while transport prices increased by 20.2 percent.
Ahsan Iqbal said that through regular meetings of the National Price Monitoring Committee (NPMC), the government was taking targeted measures to address price pressures by tackling unjustified wholesale-retail price gaps and strengthening oversight of essential commodities. He said the NPMC had also taken notice of the disparity between notified and prevailing market prices of LPG and directed the concerned authorities to take prompt corrective measures.
The Federal Minister said that Pakistan’s manufacturing sector was gaining momentum, with Large-Scale Manufacturing (LSM) growth reaching 3.0 percent in July FY2026-27 and expanding by 9.5 percent compared with June 2026.
He said strong growth was recorded in automobiles at 57.01 percent, transport equipment at 40.22 percent, tobacco at 35.82 percent, wearing apparel at 22.03 percent, electrical equipment at 7.88 percent and non-metallic mineral products at 4.25 percent. He said the performance reflected strengthening of the industrial base while also highlighting the need to revive traditional export-oriented sectors.
Turning to Pakistan’s external sector, Ahsan Iqbal said that the country had entered FY2026-27 with greater confidence in its external position. Goods exports reached US$5.4 billion during July-August FY2026-27, while exports of goods and services together rose to US$7.3 billion, registering 9.2 percent growth compared with US$6.6 billion during the corresponding period last year.
He said the encouraging aspect of export performance was its broader composition. Food exports grew by 9.3 percent, petroleum products by 42 percent, leather goods by 12.8 percent, textiles by 3.0 percent and surgical goods by 10.2 percent.
Ahsan Iqbal said that services exports had expanded by 29 percent, with ICT and digital services becoming increasingly important components of Pakistan’s foreign-exchange earning capacity. He said ICT exports reached US$811 million during July-August FY2026-27 compared with US$691 million during the corresponding period last year, demonstrating the gradual expansion of Pakistan’s exports beyond conventional sectors.
The Federal Minister said that the government was now focused on converting economic stability into higher and sustainable growth by expanding the export base, increasing value addition, scaling up technology and services exports and creating conditions for private investment to generate foreign exchange.
He said that despite stronger import demand, the current account deficit during July-August FY2026-27 was recorded at US$543 million compared with US$853 million a year earlier, representing an improvement of US$310 million or 36 percent.
Ahsan Iqbal said remittances remained an important pillar of Pakistan’s external stability, with remittances reaching US$7.3 billion during the first two months of the current fiscal year compared with US$6.4 billion during the same period last year.
He said the GCC remained the largest source of remittances, led by Saudi Arabia with US$873 million and the UAE with US$750 million, while the United Kingdom contributed US$564 million and the United States US$309 million.
The Federal Minister said that foreign investment momentum had also strengthened at the start of FY2026-27. Net Foreign Direct Investment rose 77 percent to US$316 million in August 2026 from US$179 million in July, taking net FDI during July-August FY2026-27 to US$494 million, 24 percent higher than US$399 million during the corresponding period last year.
He said fiscal consolidation remained a key pillar of the economic reform agenda. FBR tax collection increased by 3.7 percent to Rs. 1,722 billion during July-August FY2026-27 compared with Rs. 1,661 billion during the corresponding period last year, reflecting continued efforts to strengthen domestic revenue mobilization.
He said Pakistan had also secured strong interest from international investors, with the issuance of a record US$3 billion international bond attracting demand approaching US$6 billion. He said the response reflected improved market appetite for Pakistan and supported confidence in the country’s external financing position.
The Federal Minister said consumer confidence was also beginning to recover, with the IPSOS Consumer Confidence Index rising to 33.6 in the third quarter of 2026 from 33.2 in the second quarter. He said expectations for economic improvement had nearly doubled over two years, rising to 23 percent from 12 percent.
On development spending, Ahsan Iqbal said the government was front-loading development expenditure in priority sectors under the Federal PSDP 2026-27, with Rs. 1,000 billion allocated overall. He said Rs. 355.9 billion had been allocated for Transport and Communication, Rs. 602.5 billion for Water and Energy, Rs. 180.9 billion for Health and Nutrition, Rs. 88.8 billion for Special Areas and Rs. 74.5 billion for the SDGs Achievement Programme.
He said PSDP implementation had already generated visible results during the first two months of the fiscal year, with Rs. 19.65 billion utilised during July-August FY2026-27. The Water sector utilised Rs. 6.4 billion, Transport and Communication Rs. 2.9 billion, while Education, including HEC, utilised Rs. 3.4 billion against their respective allocations.
Ahsan Iqbal said development activity was moving forward with greater focus and discipline. During August 2026, the Central Development Working Party (CDWP) approved seven projects worth Rs. 25.4 billion and recommended five major projects worth Rs. 283.9 billion to ECNEC for further consideration.
He said the government was ensuring that every rupee of public investment delivered maximum value. Through rigorous CDWP scrutiny, Rs. 6.5 billion was saved in August alone, taking cumulative savings to Rs. 7.5 billion during the first two months of FY2026-27 by removing non-essential components and improving project efficiency.
The Federal Minister said public investment continued to serve as an important engine of growth and employment. Projects approved during August 2026 were expected to generate around 4,538 direct and 19,118 indirect jobs, taking the expected cumulative number of jobs to 23,656 across key sectors.
He said that during July-August FY2026-27, the Ministry of Planning strengthened development oversight by monitoring 22 projects and evaluating three projects, helping identify implementation gaps, facilitate timely course correction and ensure alignment with planned outcomes.
Ahsan Iqbal said that the Prime Minister’s Review Committee had reviewed Gilgit-Baltistan’s fiscal, energy and development priorities on August 5, 2026, reaffirming the Federal Government’s commitment to sustainable development, hydropower investment and stronger connectivity.
He said that on August 12, 2026, the Planning Commission had initiated work to unlock Pakistan’s high-value automotive export potential, with the sector tasked to develop five-year export strategies focused on technology, productivity and global markets.
The Federal Minister said that a high-level roundtable held on August 14, 2026, had identified research and development, innovation, technology adoption and domestic value-chain development as key drivers for expanding pharmaceutical exports. Pharmaceutical exports had reached a 20-year high of US$457 million in FY2025, registering 34 percent growth. The industry had been urged to develop a comprehensive export roadmap aligned with Pakistan’s ambition of exceeding US$100 billion in exports by 2035.
Ahsan Iqbal said that the economic indicators presented in the Monthly Development Update demonstrated the progress achieved in stabilisation, while the next phase required sustained efforts to transform stability into productivity, investment, exports and employment.
He emphasised that Pakistan’s international and diplomatic achievements needed to be translated into internal economic strength through continuity of reforms, political stability, productive investment and a stronger export-oriented economy.
The Federal Minister said that the government would continue to monitor economic and development indicators through regular evidence-based assessments and take timely corrective measures to ensure that public investment, economic reforms and development programmes remained aligned with Pakistan’s long-term objectives under URAAN Pakistan.
