Page 89 - CMA Journal (Mar-Apr 2026)

ECONOMY NEWS

GDP 3.7 Percent, Economy $452 Billion, Per Capita $1,901 a $12 million de cit in April 2025, while the 10MFY26
position turned into a $316 million de cit versus a $1.662
Pakistan's economy grew 3.7 percent in FY2025-26, missing
billion surplus last year, re ecting renewed external
the official 4.2 percent target, according to the National
pressure.
Accounts Committee. Growth, however, exceeded IMF (3.6
percent), ADB (3.5 percent), and World Bank (3 percent) The decline was driven mainly by higher imports, which rose
estimates and improved from last year's 3.18 percent, to $5.97 billion from $4.89 billion in March, widening the
indicating gradual recovery despite structural constraints. goods trade de cit to $3.41 billion. Exports remained stable
The economy size rose to $452.1 billion from $408.2 billion, at $2.56 billion, while services posted a small surplus of $24
while per capita income increased to $1,901 from $1,824, million. Despite $3.54 billion in remittances, higher import
re ecting overall nominal expansion. Growth was led by demand widened the external gap.
services at 4.1 percent and agriculture at 2.9 percent, while
industry grew 3.5 percent but remained constrained by In ation hits 10.9 percent in April
energy shortages and weak mining activity, despite support
from manufacturing and construction. Pakistan's in ation rose to 10.9 percent in April 2026, the
highest in nearly two years and the rst double-digit reading
World Bank cuts growth to 3 percent since July 2024, according to the Pakistan Bureau of
Statistics, exceeding the government's earlier 9 percent
The World Bank has lowered Pakistan's GDP growth forecast
estimate. The increase was driven mainly by higher fuel and
to 3 percent, citing the impact of the Middle East con ict and
energy costs amid global oil volatility, geopolitical tensions,
rising energy costs, while also warning of continued external
and increased petroleum taxes, pushing up transport and
pressures on the economy. It highlighted risks from weaker
electricity prices. Food in ation also remained elevated due
remittances, higher import bills, and sustained global oil
to higher prices of essential items such as tomatoes, onions,
price volatility affecting domestic stability.
and wheat products, keeping overall cost-of-living pressures
Fiscal de cit falls to 0.7 percent of GDP high across urban and rural areas.
Pakistan's scal de cit narrowed to Rs 856.4 billion (0.7 Energy Circular Debt rises to Rs 5.20 trillion
percent of GDP) during July–March FY2025-26, according to
the Finance Division's consolidated scal operations data.
Pakistan's circular debt in power and gas has reached Rs
Total revenue reached Rs 14.8 trillion (11.4 percent of GDP),
5.206 trillion (early 2026), according to IMF EFF 3rd and RSF
including Rs 9.3 trillion in FBR taxes and Rs 4.6 trillion in non-
2nd review reports. Of this, power sector debt stands at Rs
tax income supported by SBP pro ts and higher petroleum
1.764 trillion and gas sector debt at Rs 3.442 trillion (2.7
levy in ows, while total expenditure stood at Rs 15.7 trillion
percent of GDP), showing continued stress in the energy
(12.1 percent of GDP), with major outlays in interest
chain despite reforms. The report notes IMF-backed
payments (Rs 4.95 trillion), defence (Rs 1.7 trillion), subsidies
measures including tariff adjustments, subsidy cuts,
(Rs 631.9 billion) and grants (Rs 1.2 trillion). Provincial
conversion of power sector liabilities into CPPA-G debt, and
governments also posted a combined surplus of Rs 1.6
recovery surcharges, but the overall stock continues to rise. It
trillion, contributing to overall scal consolidation.
adds that the power sector met its end-2025 ow target
supported by improved recoveries and 9 percent demand
Current account posts $324 million de cit
growth (Dec–Feb), while in gas, tariff alignment has limited
Pakistan's current account recorded a $324 million de cit in new debt, though late payment surcharges are still
April 2026, reversing a $1.13 billion surplus in March, increasing total liabilities.
according to the State Bank of Pakistan. It also widened from

ICMA’s Chartered Management Accountant, Mar-Apr 2026 87