Pakistan economy grew 3.7%, missed target: Finance minister Muhammad Aurangzeb

Pakistan's economy grew at 3.7 per cent during the current fiscal (FY26), which missed the original target of 4 per cent but was the highest in the past four years, Finance Minister Muhammad Aurangzeb announced Thursday.

Launching the Pakistan Economic Survey (PES) for FY2025-26 at a press conference here ahead of presenting the national budget on Friday, Aurangzeb claimed Pakistan's economic growth is higher than the global economic growth of 3.1 per cent, blaming it majorly on the ongoing conflict in West Asia.

Pakistan's current fiscal ends on June 30.

The minister said that the GDP growth in FY26 was recorded at 3.7 per cent, which is lower than the 4 per cent target set at the start of the year.

"The 3.7 per cent growth is the highest in the past four years. The GDP growth was -0.2 per cent in FY2023, 2.6 in FY2024 and 3.2 per cent in FY2025," the finance minister said.

Elaborating the reason for missing the 4 per cent growth target, he said that it was due to the ongoing conflict in West Asia.

"But having said that, we have still reached a historically high size of the economy at Pakistani rupees (PKR) 126.9 trillion ($456 billion)," he said.

He further said that the floods in August and September 2025 also impacted the growth. "These challenges tested Pakistan's resilience," he said, adding that the government was able to deal with them and "remained committed to from stabilisation to growth."

The minister stated that the fiscal deficit narrowed to 0.7 per cent of GDP (PKR 856.4 billion) from 2.6 per cent of GDP (PKR 2,970 billion) in the corresponding period last year.

Similarly, primary surplus also improved to 3.2 per cent from 3 per cent, the survey document said.

Aurangzeb said that tax revenues had increased by 10.1 per cent and markup payments saw a decrease of 23 per cent, which he said increased fiscal space.

Talking about stabilisation, he said that foreign exchange reserve was over $17 billion but it would reach $18 billion by the end of fiscal year on June 30, which would be equal to three months of import - a globally accepted yardstick for stability.

Aurangzeb said that last month Pakistan received a record $4.3 billion remittances, showing that the remittances in the first 11 months crossed $33 billion.

Giving a sector-wise breakdown, he said growth in agriculture was recorded at 2.89 per cent against the target of 2 per cent, but it higher as compared to 1.53 per cent in the last fiscal year.

He said that large scale manufacturing registered 6.1 per cent growth, which was the highest in the last four years.

He said that the service sector, which is close to 58 per cent of GDP, grew by 4.9 per cent. "This, too, is the highest in the last four years," he said.

The minister said that more than 3,000 new companies were registered during the current fiscal which captures the business sentiments of the country. He said the total number of registered companies was now about 3,00,000.

The minister said that inflation remained at 6.2 per cent during the year against 4.7 per cent during the same period last year.