- Minister says economy demonstrated remarkable stabilisation.
- Pakistan vulnerable to global energy markets disruptions: Iqbal.
- Iqbal terms ongoing Middle East conflict major external shock.
Planning Minister Ahsan Iqbal on Monday warned that higher oil prices driven by the Middle East conflict could pose risks to Pakistan’s economy and put pressure on its external sector.
Speaking to the media virtually at the launch of the ministry’s Monthly Development Report, the minister highlighted key macroeconomic indicators, development progress and policy responses to emerging global challenges.
Iqbal said that Pakistan’s economy had demonstrated remarkable stabilisation during the first eight months of the current fiscal year despite challenging global conditions.
He maintained that the ongoing Middle East conflict had emerged as a major external shock, impacting global growth and inflation.
The conflict posed risks to Pakistan through higher oil prices, increased import bills and pressure on the external sector, he said, citing the country’s heavy reliance on imported fuel.
Pakistan remained vulnerable to disruptions in global energy markets and shipping routes, particularly through the Strait of Hormuz, the minister added.
Highlighting government measures, Iqbal said that a balanced approach was adopted to manage energy price volatility.
The government partially passed on a Rs55 per litre increase in petroleum prices while absorbing a fiscal cost of around Rs129 billion to shield consumers, he added.
According to Iqbal, subsequent increases in global prices led to further adjustments, followed by relief measures, including a reduction in the petroleum levy and cuts in fuel prices in April.
Macroeconomic indicators
On Macroeconomics, he said that average inflation stood at 5.7% during July-March of the fiscal year 2025-26, compared to 5.3% last year.
Economic growth improved to 3.8% in the first half against 1.9% in the corresponding period.
Large-scale manufacturing posted a strong recovery of 5.9% during July-February, compared to a contraction last year.
The minister noted an increase in domestic inflationary pressures, with March inflation rising to 7.3% compared to 0.7% a year ago, mainly driven by higher energy and transport costs.
On the external front, he said remittances remained strong at $30.3 billion, showing an 8.2% increase, while exports of goods and services stood at $30.6 billion during July-March FY2026.
Similarly, services exports grew by 17% to $7.3 billion, reducing the services deficit by 7%.
Imports rose to $56.3 billion, widening the trade deficit, though improved remittances and services exports provided support to the external account.
The current account posted a surplus of $1.07 billion in March, while the cumulative surplus for July-March remained marginal at $8 million compared to $1.67 billion last year.
On fiscal performance, Iqbal said the Federal Board of Revenue (FBR) collections reached Rs9.3 trillion during July-March, reflecting a 10.1% increase due to improved enforcement and administrative measures.
Public Sector Development Programme (PSDP) utilisation reached about Rs415 billion, representing around 41-42% of allocations.
The minister said that cost rationalisation efforts resulted in savings of Rs10.5 billion during July-February FY2026.
Iqbal asserted that Pakistan, despite global uncertainty, was moving towards sustained economic stabilisation through disciplined reforms, prudent fiscal management and continued development efforts.
