Pakistan economic survey 2025-26: GDP at four-year high, poverty climbs to 28.9%

Pakistan's nominal economic size reached Rs126.9 trillion, equivalent to $452.1 billion, the largest in the country's history. Per capita income rose to $1,901 from $1,751 the previous year. Aurangzeb described the survey as "not only an economic document, but it also tells a story about the past of one year, in terms of resilience, the discipline maintained and the renewed confidence."

The minister outlined three exogenous factors that shaped FY26. The year opened with tariff uncertainty stemming from global trade negotiations. By end of July 2025, Pakistan had secured a competitive export position, particularly with respect to shipments to the United States. Monsoon floods then struck in August and September, triggering rescue, relief and rehabilitation efforts and damaging infrastructure and farmland across major growing regions. In March 2026, a regional conflict broke out. Aurangzeb noted that at the time of the previous economic survey, only the tariff uncertainty had been present. The other two factors were not yet in the picture.

The finance ministry, planning ministry and State Bank of Pakistan had earlier been unanimous that economic growth in FY26 would exceed 4%. The Middle East conflict constrained that expansion. Global GDP growth fell to 3.1% in 2026. Pakistan's own growth trajectory over the past four years ran as follows: negative 0.2% in FY2022-23, 2.6% in FY24, 3.2% in FY25 and 3.7% in FY26.

Fiscal Consolidation and Tax Revenue

The fiscal deficit narrowed to 0.7% of GDP in FY26, compared with 2.6% the previous year. The primary balance remained in surplus. Federal Board of Revenue revenues grew 10.1% over the year. June 2026 alone recorded a 46% year-on-year jump in FBR revenues. Tax revenue has grown 40% over the past two years. The tax base has doubled from Rs7 trillion to Rs13 trillion. Markup payments declined 23%, creating additional room in the fiscal space. Private sector credit stood at $11.57 billion.

Pakistan's current account posted a surplus of $72 million during July-March FY26, supported by remittance inflows. Workers' remittances hit a record $4.25 billion in May 2026. Roshan Digital Account inflows averaged $180 million to $190 million per month through March 2026. In April, RDA inflows rose to $322 million. In May, they were expected to cross $300 million.

On exports, the food sector recorded a combined decline of $1.5 billion. Rice exports fell $1.1 billion and sugar exports dropped $403 million. In the textile sector during July-May FY26, woven garments shipments rose 5%, home textiles increased 3% and knitted garments grew 3%. Sports goods exports surged 18%. Aurangzeb noted that Pakistani footballs would be used at the upcoming FIFA World Cup. IT exports reached $3.8 billion in the first ten months of the fiscal year and were projected to reach $4.5 billion by year-end. Freelancer export earnings stood at $856.3 million and were expected to cross $1 billion.

Inflation fell sharply from crisis levels reached in prior years. The oil import bill rose by $1 billion in April 2026 as international crude prices surged. In May, Pakistan managed to restrict that increase to $500 million. Aurangzeb said energy had been managed well overall.

Agriculture: Crops, Livestock and Inputs

Agriculture grew 2.89% in FY26, up from 1.53% the previous year. The sector contributes 23.4% to national GDP and employs 33.1% of the workforce. The survey credited timely government interventions and the establishment of the National Agriculture and Food Security Council as factors enabling the sector to outperform initial expectations despite the monsoon floods.

The crop sub-sector, which had contracted 1.01% in FY25, recovered with 1.44% growth in FY26. Among the five major crops — cotton, rice, sugarcane, maize and wheat — overall growth came in at 0.65%, a turnaround from a 13.19% contraction recorded the previous year. Sugarcane was the strongest performer, rising 6.2% to 89.45 million tonnes from 84.24 million tonnes, driven by expanded cultivation area and a 3.7% improvement in yield. Wheat output rose 4.3% to 29.61 million tonnes from 28.40 million tonnes, supported by the Interim Wheat Policy 2025-26 and improved availability of certified seeds and fertilisers. Rice production grew 2.8% to 9.99 million tonnes from 9.72 million tonnes on a 6.6% yield improvement despite a decline in cultivated area.

Cotton production dipped 0.5% to 7.05 million bales as farmers shifted to more profitable alternatives. Maize output fell 2.7% to 8.79 million tonnes due to flood-related yield losses. The other crops category grew 2.43%, with pulses up 31.4%, vegetables up 12.6% and fruits up 2.8%.

The livestock sub-sector grew 3.75% in FY26, up from 2.95% the previous year, and accounts for 62.4% of agriculture's total value addition and 14.6% of national GDP. Gross value addition in livestock grew from Rs6,004 billion to Rs6,229 billion. Milk production reached 74,689 thousand tonnes from 72,343 thousand tonnes. Total meat production climbed to 6,314 thousand tonnes. Poultry meat output rose to 2,826 thousand tonnes. Pakistan ranks as the world's eleventh-largest poultry producer, with the sector employing more than 1.5 million people and recording an average annual growth rate of 8.1% over the past decade. The National Meat Sector Transformation and Export Council, constituted under the prime minister, has set a target to raise meat exports to $700 million by 2028. Meat exports grew from $196 million in 2015 to over $500 million in FY25.

Forestry grew 2.02% and fishing 1.66%. Fertiliser nutrient offtake during July-March FY26 reached 3,795 thousand tonnes, up 11.4% from the same period of FY25. Nitrogen offtake rose 14.8%, potash use jumped 26.2% and phosphate offtake dipped 1.9%.

Industry, Manufacturing and Services

Large-Scale Manufacturing grew 6.1% in FY26, its highest rate in four years. Of 22 LSM sectors tracked by the survey, 16 posted positive growth. Sectors recording growth included food, textiles, wearing apparel, petroleum products, non-metallic minerals, automobiles, beverages and electrical equipment. Aurangzeb described the LSM growth as broad-based, stating: "It's not one single sector which is leading or contributing to the 6.1% growth in large-scale manufacturing."

Demand indicators pointed in the same direction. Cement consumption rose 10%, fertiliser consumption increased 17%, petroleum sector volumes grew 5%, automobile sales climbed 31% and mobile phone sales rose 9%.

Services, which account for 58% of GDP, grew 4.9% in FY26, also the highest in four years. Information and communication services within that segment grew 7.52%.

ICT exports reached $3.388 billion for the fiscal year. The IT and IT-enabled services trade surplus stood at $2.911 billion. The telecom sector generated Rs837 billion in revenues and expanded its subscriber base to 207.22 million, with broadband users reaching 161 million by March 2026. Tele-density reached 82.6%. The sector contributed Rs285 billion to the national exchequer in taxes and duties. The Pakistan Telecommunication Authority conducted a 5G spectrum auction on March 10, 2026, generating $509.6 million, equivalent to approximately Rs142.6 billion. Over 5.14 million individuals received digital skills training during the fiscal year.

Energy: Power, Oil and Gas

Pakistan's total installed electricity generation capacity stood at 49,651 MW as of July-March FY26, up 8.5% from 45,782 MW in the same period of FY25. Net metering additions accounted for 7,319 MW of the increase. Out of 102 commissioned independent power producers, 13 with a combined capacity of 5,105 MW were closed. These comprised nine residual fuel oil-based IPPs of 2,877 MW, three gas or RLNG-based IPPs of 601 MW and one multi-fuel IPP of 1,638 MW.

The energy mix comprised 49.2% thermal, 23.4% hydel, 20.3% renewables and 7.1% nuclear. Total electricity generated was 92,835 GWh, of which hydel, nuclear and renewable sources combined accounted for 53.1%. Total electricity consumption during July-March FY26 was 83,143 GWh, up 3.8% from 80,811 GWh in the same period of FY25. The household sector's share of consumption declined to 47.5%, amounting to 39,472 GWh, from 49.6%, amounting to 39,730 GWh, in the same period of FY25. Industrial consumption rose to 26,205 GWh from 21,083 GWh, with its share rising from 26.3% to 31.5%. Agriculture sector electricity use fell 42.3% to 2,636 GWh from 4,566 GWh, reducing its share from 5.7% to 3.2%.

Total petroleum product consumption during July-March FY26 stood at 13.64 million metric tonnes, up 3.5% from 13.17 MMT in the same period of FY25. Transport sector fuel demand rose 6.7% to 11.25 MMT, representing 82.5% of total demand. Industrial petroleum consumption fell 42.6% to 433,500 metric tonnes from 754,600 metric tonnes. Total petroleum imports for the July-March period reached 13.88 MMT, up from 12.53 MMT the previous year, with the total import bill rising to $8.9 billion from $8.4 billion. Motor spirit imports increased 2.3% in volume to 4.07 MMT while the import value fell 2.4% to $2.96 billion from $3.03 billion.

Average natural gas consumption was approximately 2,929 MMCFD during July 2025 to March 2026, including 613 MMCFD of RLNG. Indigenous gas supplies contributed approximately 29.3% to the country's total primary energy supply mix in FY26. Pakistan has a gas network of over 13,729 km of transmission pipelines, 124,382 km of mains and 30,661 km of service pipelines serving more than 10.9 million consumers. The two gas utility companies, SNGPL and SSGCL, laid 729 km of mains and 403 km of service lines during July 2025 to March 2026, connected 95 villages or towns to the gas network and provided 149,908 new gas connections, comprising 148,225 domestic, 1,578 commercial and 105 industrial connections.

Poverty, Inequality and Social Spending

The survey recorded a national poverty rate of 28.9% in 2024-25. Pakistan's poverty rate stood at 50.4% in 2005-06, declined to 21.9% in 2018-19 and has since risen to 28.9%. The national Gini coefficient, a measure of income inequality, rose from 28.4 to 32.7 between 2018-19 and 2024-25. Rural poverty stood at 36.2%. Urban poverty was 17.4%.

Pro-poor government expenditures reached Rs4.66 trillion during July-March FY26, compared with Rs4.25 trillion in the same period of FY25. The Benazir Income Support Programme received an allocation of Rs722.49 billion for FY26. Rs540.27 billion was disbursed during the first nine months of the fiscal year. Social security and welfare spending totalled Rs822.21 billion. Disaster-related expenditures were Rs224.92 billion.

The survey noted improvements in school attendance, literacy levels, internet access, immunisation coverage, sanitation facilities and access to cleaner cooking fuels between 2018-19 and 2024-25.

Aurangzeb said at the survey's launch that traditional economic indicators are not ensuring job growth. "We need a paradigm shift in the age of AI," he said. He added that the government intends to adopt AI-led productivity models and called for industry to review business models and productivity frameworks. The finance minister also stated: "We can't go after 40 to 50-year-old discussions."