Karachi, February 26, 2026 – The Institute of Cost and Management Accountants of Pakistan (ICMAP) has said that Pakistan’s economy is gradually stabilizing, though persistent structural challenges continue to cast a shadow over sustainable growth.
In its latest review of the national economy released on Thursday, ICMAP highlighted that fiscal imbalances, widening trade deficits, revenue shortfalls, and inflationary pressures underscore the urgent need for comprehensive tax reforms, export promotion, and disciplined macroeconomic management to strengthen economic resilience.
Economic Snapshot: Oct–Dec 2025 (FY2026 Q2)
According to the ICMA Research and Publications Department’s report titled “Economic Infographics: A Snapshot of Pakistan’s Economy”, the economy showed signs of cautious stabilization during the October–December 2025 quarter of FY2026, although fiscal and trade pressures continued to weigh on investor sentiment and household budgets.
The Federal Board of Revenue (FBR) collected Rs. 3,274 billion against a quarterly target of Rs. 3,467 billion, recording a shortfall of Rs. 193 billion, with all three months posting revenue deficits.
On the external front, exports stood at $7.66 billion, while imports surged to $15.84 billion, significantly widening the trade deficit. This imbalance resulted in a current account deficit of $458 million, despite a brief surplus of $98 million in November 2025.
Remittances, Reserves, and Inflation Relief
Despite these pressures, key indicators offered cautious optimism. Workers’ remittances reached $10.2 billion, providing crucial support to the economy. Saudi Arabia, the UAE, and the UK contributed $2.4 billion, $2.1 billion, and $1.54 billion, respectively.
Foreign exchange reserves rebounded, with SBP reserves rising from $14.5 billion in October to $16.1 billion in December, while commercial banks’ reserves increased to $4.7 billion.
For households, inflation eased considerably. The Consumer Price Index (CPI) declined from 1.7% in October to -0.4% in December, while the Sensitive Price Index (SPI) improved from 0.9% to -0.8%, providing relief to monthly budgets.
Credit Growth and Financial Market Performance
Private sector credit expanded from Rs. 9.95 trillion in October to Rs. 10.93 trillion in December, reflecting improving business confidence. Meanwhile, government borrowing declined from Rs. 2,796.8 billion to Rs. 2,310.6 billion, easing crowding-out pressures.
The Pakistan Stock Exchange mirrored this optimism, with the KSE-100 index climbing from 161,632 points to 174,054 points, and market capitalization rising from Rs. 18,561 billion to Rs. 19,689 billion.
Industry, Corporate Sector, and Diaspora Confidence
Corporate activity remained robust, with 10,421 new companies registered, taking the total to 279,724. The cement sector recorded 13.24 million tons in dispatches, including 2.04 million tons in exports, while the automotive industry produced 38,805 passenger cars.
Funds in Roshan Digital Accounts (RDA) increased from $11.31 billion to $11.71 billion, reflecting sustained confidence among overseas Pakistanis.
Debt Position and Growth Outlook
Domestic debt rose from Rs. 53.96 trillion to Rs. 55.36 trillion, while external debt reached Rs. 23.17 trillion. Foreign inflows during the quarter were led by Saudi Arabia’s $302.31 million oil facility support and China’s $198.35 million bilateral assistance.
ICMAP projects GDP growth of around 3.5% for FY2025–26, aligning with estimates from the IMF, World Bank, UN, ADB, and Moody’s. The State Bank of Pakistan expects a slightly higher growth range of 3.75% to 4.75%, signaling cautious optimism for economic recovery.