Economy to ‘grow by 4pc’ in FY26, says finance minister

Pakistan’s Finance Minister Muhammad Aurangzeb has expressed confidence that the country’s economy will grow by around 4 percent in the current fiscal year (FY26), signaling cautious optimism amid ongoing global and regional economic challenges.

According to the minister, Pakistan’s macroeconomic indicators are showing signs of improvement, with stability in key areas such as foreign exchange reserves, inflation, and the current account balance. He noted that the government is focused on maintaining fiscal discipline while supporting sustainable growth.

Officials say the projected growth reflects gradual recovery following a period of economic strain, supported by reforms under international financial programs and improved investor confidence. Strong remittances and better external account management have also contributed to the positive outlook.

However, the minister acknowledged that external risks remain, particularly due to ongoing geopolitical tensions in the Middle East, which could impact energy prices, supply chains, and inflation. Analysts warn that Pakistan, like other emerging economies, remains vulnerable to global shocks and rising import costs.

The government has reiterated its commitment to structural reforms, including broadening the tax base, improving state-owned enterprise performance, and attracting foreign investment to sustain long-term growth.

Economists say that while a 4% growth target indicates recovery momentum, achieving higher and more sustainable growth will depend on continued reforms, political stability, and a favorable global economic environment.