Pakistan’s economy is expected to retain its positive trajectory in the near term, led by a recovery in industrial output and supported by fiscal discipline, governance reforms and digitalisation, the Ministry of Finance said in its Monthly Economic Update & Outlook for December 2025 released on Wednesday.
The ministry said large-scale manufacturing is likely to maintain its recovery path as structural reforms aimed at improving industrial competitiveness continue. It cited sustained activity in textiles, automobiles, cement and food processing as key drivers.
The assessment follows data released by the Pakistan Bureau of Statistics on Tuesday showing economic growth of 3.71 per cent in the first quarter of FY2025-26, largely on the back of higher industrial production. The official figures, however, have been questioned by opposition leaders and some economists, who described them as unrealistic.
On inflation, the finance ministry projected consumer prices to remain in the range of 5.5 to 6.5 per cent in December, primarily due to base effects. Headline inflation stood at 6.1 per cent year-on-year in November 2025, exceeding the ministry’s earlier projections.
The report said Pakistan’s current account position is expected to remain within programme targets. It added that strong remittance inflows and steady growth in information technology and services exports are likely to help absorb external pressures.
On the fiscal side, the ministry said consolidation efforts would continue to underpin macroeconomic stability. It said expenditure management, improved tax collection and ongoing structural reforms are expected to support sustainable economic growth in the coming months.
