Pakistan’s inflation is expected to remain between 5–6% in November, the Finance Division said in its Monthly Economic Update, adding that the country’s economic outlook remains “cautiously optimistic” despite pressure from declining agricultural output and rising food prices.
The report also highlighted a sharp 26% fall in foreign direct investment (FDI) during the first four months of fiscal year 2026. FDI fell to $747.7 million in July–October, compared to $1.01 billion in the same period last year.
The decline came despite stronger inflows in October, when FDI rose 22.6% year-on-year to $178.9 million, mainly from China ($226.7 million) and Hong Kong ($120.1 million). Power and financial services remained the top-receiving sectors.
Total foreign investment fell substantially to $209.2 million, against $1.19 billion last year, as portfolio flows turned negative at –$538.5 million compared to a positive $185.7 million in the same period in FY2025.
As of 14 November, Pakistan’s foreign exchange reserves stood at $14.5 billion. Remittances provided key support, rising 9.3% to $12.96 billion in July–October, with Saudi Arabia and the UAE remaining the largest sources. October inflows reached $3.42 billion, up 11.9% year-on-year.
The Finance Division also reported the first quarterly decline in public debt in more than five years, amounting to Rs1.37 trillion, due to the early retirement of expensive debt to reduce rollover risks.
Sugarcane production for 2025-26 is estimated at 84.74 million tonnes, up 0.6% despite floods.
Cotton output is projected to fall 3.3% to 6.85 million bales. Rice production is down 3.2% to 9.41 million tonnes, and maize output has declined 6.7%. Moong and chilli production, however, increased by 14.9% and 0.5% respectively. The Federal Committee on Agriculture has set a wheat production target of 29.68 million tonnes for Rabi 2025-26.
Agricultural credit disbursement increased 18.6% to Rs845.3 billion, while imports of agricultural machinery rose 23.5% to $49.3 million.
Large-scale manufacturing grew 4.1% in July–September, with 15 sectors posting positive growth.
CPI inflation recorded 6.2% in October, up from 5.6% in September.
Net federal revenues rose 2.4% to Rs4.12 trillion, while FBR tax collection increased 11.4% to Rs3.83 trillion during July–October. Federal expenditures climbed 11.9%, leading to a fiscal surplus of Rs1.34 trillion.
The current account deficit widened to $733 million in July–October compared to $206 million last year.
Private-sector credit saw a net contraction of Rs54.9 billion, sharply lower than Rs878.7 billion borrowed a year earlier.
Goods exports rose 2% to $10.6 billion, but imports increased 9.6%, pushing the trade deficit to $10.1 billion.
The Pakistan Stock Exchange saw a bearish October, with the KSE-100 Index falling 3,862 points to 161,631, while market capitalisation dropped Rs702 billion.
Overseas employment registrations increased 22.8% month-on-month in October to 90,339, taking the July–October total to 278,613.
The Pakistan Poverty Alleviation Fund disbursed 7,459 interest-free loans worth Rs456.9 million, while BISP spending rose 43.3% to Rs143.3 billion.
The Finance Division said the economic outlook remains “cautiously optimistic”, with industrial activity strengthening and inflation expected to stabilise as supply disruptions ease. Strong remittances, steady exports and ongoing reform measures are expected to support overall economic momentum in the coming months.
