Ministry of Finance Releases Monthly Economic Update and Outlook Report; Predicts Economic Recovery for FY2026-27, October Inflation Between 9.5 and 10.5 Percent, and Improved Agricultural Output
ISLAMABAD: The Ministry of Finance has officially published its Monthly Economic Update and Outlook Report forecasting a continued economic recovery during the current fiscal year, due to the support of structural reforms and increased agricultural production.
The outlook report predicts that Pakistan’s economy will see significant recovery in 2026-27, with better crop yields likely to improve the income of the rural population and drive overall business activity. In addition, inflation is expected to remain in the 9.5 to 10.5 per cent range in October 2026, with the outlook for inflation in the coming months also largely dependent on global energy prices and the trajectory of the food supply chain.
In His Excellency’s opinion, the key highlights of the Monthly Economic Update published by the Ministry of Finance are as follows:
Growth Drivers and Industrial Outlook: The report highlights the opportunities for sustainable economic growth through improvement of the tax administration system and energy saving measures. A rise in the number of machinery imports, expansion of the food processing industry in support of agricultural growth, and state-owned enterprise (SOE) reforms are expected to bolster local manufacturing capacity.Rising imports of machinery, expansion of the food processing industry in support of agricultural growth, and the reforms of state-owned enterprises (SOEs) are expected to bolster manufacturing capacity.
Remittances and Foreign Reserves: Positive development is reflected in the outlook of overseas worker remittances and services exports, to strengthen national income and foreign exchange reserves. The economy keeps enjoying good underlying conditions, and government priorities stay on the path of a strong push on tax collection and the reduction of expenditures, apart from development.
Fiscal Discipline and Vulnerable Support: emphasising the importance of sustainably achieving a budget surplus as a positive step towards macroeconomic stability. It also reiterates continuity of the targeted social safety nets to shield vulnerable lower-income groups and reminds that industrial performance was more unevenly spread across sectors, but September saw there be a significant easing of inflationary pressures.