Summary Pakistan’s leading financial and regulatory institutions have released fresh economic indicators showing improvements in industrial activity and reserves
KARACHI: Pakistan’s major financial and economic institutions have released fresh economic data outlining the current state of the country’s economy, highlighting both signs of recovery and areas of growing concern.
The latest figures compiled from the State Bank of Pakistan, Pakistan Stock Exchange, Federal Board of Revenue, National Electric Power Regulatory Authority and the Pakistan Bureau of Statistics indicate improvements in industrial activity, foreign exchange reserves, cement sales, and the automobile sector.
However, rising inflation, growing government debt, declining foreign investment, and a widening current account deficit continue to pose serious economic challenges.
According to the report, Pakistan’s automobile sector recorded strong growth over the past year. Annual vehicle sales surged by 106.9 per cent, while tractor sales increased by 76.3 per cent, reflecting higher consumer and agricultural demand.
Auto financing also witnessed significant expansion, increasing by 36.6 per cent to reach Rs360 billion.
The report further stated that fertilizer sales rose sharply due to increased agricultural activity, recording annual growth of 84.7 per cent. Meanwhile, large-scale manufacturing activity improved considerably, with the industrial growth index rising 11.1 per cent over the year to 124.9 points.
Pakistan’s construction sector also showed positive momentum, with cement sales increasing by 11.1 per cent to reach 3.9 million tonnes.
The stock market remained one of the strongest-performing sectors of the economy. The benchmark KSE-100 Index posted monthly growth of 9.6 per cent and annual growth of 46.4 per cent, reflecting strong investor activity and improving market confidence.
Despite these positive indicators, the report highlighted growing macroeconomic concerns. Inflation climbed to 11.1 per cent, mainly due to rising petroleum prices and increased transportation costs.
Government debt also crossed what analysts described as dangerous levels, exceeding Rs80 trillion during the past year.
According to the data, Pakistan’s current account balance slipped from surplus into deficit territory due to rising imports. The current account deficit reached $324 million, while the country’s import bill climbed to nearly $7 billion.
Foreign investment also recorded a sharp decline, with net external investment falling by 69.5 per cent to only $54.5 million, raising concerns about investor confidence and external financing.
However, foreign exchange reserves held by the State Bank improved significantly, increasing by 55.2 per cent to surpass $15 billion.
The report noted that workers’ remittances rose by 10.5 per cent over the year, while the Pakistani rupee slightly strengthened by 0.8 per cent against the US dollar.
Electricity generation declined by 9.7 per cent due to lower demand, while sales of petroleum products also weakened, with diesel sales falling 11.6 per cent and petrol sales declining 6.9 per cent annually.
Private sector lending for commercial activities increased by 11.8 per cent, reaching Rs106 trillion, indicating continued business activity despite broader economic pressures.
Economists say the latest data presents a mixed picture of Pakistan’s economy, where improvements in industrial output and market activity coexist with inflationary pressures, debt concerns, and external sector vulnerabilities.
