ISLAMABAD, October 26, 2026: Pakistan’s Ministry of Finance has reported improvements in foreign exchange reserves, exports, remittances and investment during the first quarter of fiscal year 2026-27, while highlighting progress in privatisation, financial inclusion and digital reforms.
The ministry’s economic performance scorecard for July–September 2026 showed that State Bank of Pakistan (SBP) foreign exchange reserves reached $21.5 billion, up 52 percent year-on-year, while total liquid foreign exchange reserves stood at $26.8 billion.
According to the report, the improvement increased Pakistan’s import coverage to more than three months, compared with 2.2 months a year earlier. The rupee also appreciated by 1.5 percent on a year-on-year basis.
However, the current account deficit widened to $874 million during the quarter, compared with $755 million in the corresponding period last year.
Exports and remittances strengthen
Pakistan’s total exports increased by 11 percent to $11.2 billion during the first quarter, according to the ministry.
Goods exports rose by 8 percent to $8.5 billion, while services exports increased by 23 percent to $2.7 billion.
Information technology and technology-related exports grew by 18 percent to $1.25 billion, with September recording the second-highest monthly IT export earnings in Pakistan’s history.
Freelancers’ export earnings climbed by 46 percent to $550 million, while September registered a record monthly performance in this category.
Workers’ remittances increased by 14 percent to $10.9 billion, with Saudi Arabia, the United Arab Emirates, the United Kingdom and European Union countries remaining major sources.
Meanwhile, cumulative inflows through Roshan Digital Accounts reached $14.3 billion, up 28 percent year-on-year. The number of accounts exceeded 975,600.
Foreign investment and credit ratings improve
Foreign direct investment increased by 20 percent to $720 million during July–September 2026.
Foreign private investment rose by 44 percent to $691 million, while net foreign public investment inflows reached $2.96 billion.
The ministry reported total net foreign investment inflows of $3.65 billion, compared with a net outflow of $33 million during the corresponding quarter last year.
Pakistan also recorded improvements in international credit ratings.
Moody’s upgraded the country’s rating by two notches from Caa1 to B3, while S&P raised its rating from B- to B. Fitch maintained its B- rating. All three agencies assigned stable outlooks.
The report also highlighted a staff-level agreement with the International Monetary Fund on the fourth review of the Extended Fund Facility and the third review of the Resilience and Sustainability Facility.
Subject to approval by the IMF Executive Board, Pakistan could receive an additional $1.2 billion in financing.
Tax collection and private-sector lending rise
Federal Board of Revenue tax collections reached Rs3.1 trillion during the first quarter, representing a 7 percent annual increase, according to the ministry.
The report said the FBR exceeded its quarterly collection target, while the number of income tax return filers increased by 45 percent to 5.77 million.
Private-sector credit reached Rs11.28 trillion by September 2026, reflecting annual growth of 16.6 percent.
Financing for small and medium-sized enterprises increased by 66 percent to Rs1.14 trillion, while housing finance rose by 71.9 percent to Rs365 billion.
Automobile financing grew by 33.6 percent to Rs407 billion, and lending to agriculture, forestry and fisheries increased by 30.9 percent to Rs709 billion.
Manufacturing-sector credit expanded by 12.3 percent to Rs5.89 trillion.
The ministry said the policy interest rate had remained at 11.5 percent through September 2026, down from 22 percent in June 2024.
The scorecard covers the period before the SBP’s October 26 decision to raise the policy rate to 12 percent.
Industrial activity shows modest recovery
Large-scale manufacturing output increased by 1.85 percent year-on-year during July and August 2026.
Garments, automobiles, petroleum products and transport equipment contributed positively to industrial growth.
Automobile sales increased by 28 percent, petroleum product sales by 6 percent, cement sales by 4 percent and fertiliser sales by 2 percent.
The ministry also reported stronger activity in financial markets.
The number of equity investors at the Pakistan Stock Exchange exceeded 656,000, representing annual growth of 55 percent.
A record 25,281 new investor accounts were opened in September, with Generation Z and millennials accounting for 85 percent of new stock market investors.
Four initial public offerings raised Rs4.6 billion during the quarter, compared with one IPO in the corresponding period last year.
Privatisation programme moves forward
The Ministry of Finance reported progress in the privatisation of state-owned enterprises, including Pakistan International Airlines and First Women Bank, which it said had entered post-transaction stages.
It also reported investor interest in the proposed privatisation of three electricity distribution companies.
A total of 29 investors were prequalified for Faisalabad Electric Supply Company, Gujranwala Electric Power Company and Islamabad Electric Supply Company.
Of these, 10 were prequalified for FESCO, nine for GEPCO and 10 for IESCO.
The ministry said work was continuing on airport outsourcing projects in Islamabad, Lahore and Karachi, with interest from investors in Saudi Arabia, Türkiye and the UAE.
Privatisation initiatives involving House Building Finance Corporation and Zarai Taraqiati Bank were also progressing.
Housing and targeted financing programmes expand
Under the Wazir-e-Azam Apna Ghar Programme, financing approvals reached Rs426 billion, of which Rs76 billion had been disbursed, according to the ministry.
The Zarkhez-e Programme recorded financing approvals of Rs7.87 billion and disbursements of Rs2.14 billion.
Under the Electric Mobility Programme, Rs986 million in financing was disbursed, supporting the provision of 2,816 vehicles.
The government also reported allocating Rs75 billion for targeted fuel relief during the regional conflict.
According to the scorecard, more than 12 million people directly benefited from the programme, which covered motorcycles, rickshaws, Qingqi vehicles and cars with engine capacities of up to 800cc.
Digital payments and business registrations accelerate
The report highlighted continued expansion of digital financial services and tax administration reforms.
During fiscal year 2025-26, digital channels accounted for 92 percent of retail payments by transaction volume.
The number of digital payment transactions reached 13.2 billion, representing annual growth of 65 percent.
Active digital merchants exceeded two million, while the digital merchant network expanded fourfold.
Digital channels also accounted for 75 percent of government payment receipts.
The ministry said more than 13,900 retailers and 37,900 branches were connected to the point-of-sale system.
Tax administration reforms included electronic invoicing, the National Faceless Centre, IRIS 3.0, artificial intelligence and data analytics.
Meanwhile, 15,440 new companies were registered during the first quarter, an increase of 45 percent year-on-year.
Nearly all new company registrations — 99.9 percent — were completed digitally.
Government debt declines from June level
The ministry reported that central government debt stood at Rs86 trillion in August 2026, representing a reduction of Rs714 billion compared with June.
Domestic debt declined by Rs684 billion to Rs58.8 trillion, while external government debt remained at approximately $98.2 billion.
Pakistan’s debt-to-GDP ratio stood at 68 percent in fiscal year 2025-26, compared with 75 percent in fiscal year 2022-23.
The ministry said its reform priorities would focus on translating macroeconomic stability into sustainable growth, employment opportunities and increased private investment.
While the scorecard highlighted improvements across several economic indicators, the widening current account deficit and renewed inflationary pressures remain important challenges for Pakistan’s economic outlook.