Pakistan Economic Insights (October-November 2025)

Pakistan’s economy in the first six months of FY2025-26 shows a mixed picture of resilience amid mounting strain. Though fiscal consolidation, monetary steadiness, and growth in manufacturing (e.g., automobiles, cement) indicated fundamental fortitude, noteworthy vulnerabilities are increasing. The most serious compression point is the weakening agriculture sector, which grew merely at 0.56% in FY25, intimidating food security and inflation. Simultaneously, the external sector is fading, with a broadening current account deficit determined by rising imports (particularly consumer durables and food) and deteriorating exports. Inflationary burdens are re-developing, and political ambiguity complements the risks. The economy’s optimistic course is therefore confronted by structural weaknesses in agriculture and a mounting trade disparity, necessitating crucial policy emphasis to endure stability.