ISLAMABAD – The Finance Ministry has released its monthly Economic Update and Outlook report, which expects an economic recovery this fiscal year. Improved agricultural output could support the economy, and inflation is projected to stay between 9.5 and 10.5 percent in October.
According to the report, Pakistan is expected to see an economic recovery during fiscal year 2026-27. Better crop yields are expected to raise rural incomes and business activity. Inflation in October 2026 is likely to remain between 9.5 and 10.5 percent, and its future path will depend on global energy prices and food supply.
The report said improvements in the tax system and energy savings would help sustain economic growth, and that reforms of state-owned enterprises are expected to strengthen the economy. The food processing industry will benefit from higher agricultural output, while increased construction activity is expected to boost economic activity. Production is likely to rise in a few large industries, and machinery imports are expected to expand the country’s productive capacity.
Remittances from abroad and services exports are likely to grow. Higher remittances will support national income and foreign exchange reserves, and strong reserves are already supporting the economy. The government is focused on raising tax collection and keeping expenditure under control.
The report stressed the need to continue measures to support vulnerable and low-income groups. It described the budget surplus as a positive development for economic stability. It also noted that the improvement in industrial output is uneven, with performance varying across sectors. Inflation declined in September.
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