Pakistan’s tax revenue collection has reached Rs8.1 trillion during the first eight months of the fiscal year 2025–26, reflecting stronger compliance, improved tax administration, and expanding economic activity across various sectors. The figure represents a notable increase compared to Rs7.3 trillion collected during the same period of the previous fiscal year. The update was shared by Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal during a news conference in Islamabad where he presented the government’s monthly development update for February 2026. The minister stated that the country’s economic indicators during the first eight months of the fiscal year point toward gradual stabilization and recovery following a period of macroeconomic challenges.
According to the minister, the rise in revenue collections reflects the combined impact of administrative improvements and economic expansion. However, he noted that inflationary pressures resurfaced in February, when the inflation rate climbed to 7.0 percent compared to 1.5 percent recorded in the same month last year. He attributed this rise largely to the low base effect and adjustments in electricity tariffs during the month.
Despite the increase recorded in February, the broader inflation trend remained relatively stable over the fiscal year period. Average inflation during July to February FY2025–26 stood at 5.5 percent, slightly lower than the 5.9 percent recorded during the corresponding months of the previous fiscal year. The minister highlighted that prices of several essential food commodities experienced noticeable declines during this period.
Among the items that recorded substantial price reductions were eggs, which declined by 22.4 percent, chicken which dropped by 20.0 percent, and potatoes which fell by 16 percent. These reductions contributed to easing overall inflation pressures during much of the fiscal year. However, Ahsan Iqbal cautioned that developments in global energy markets and geopolitical tensions in the Middle East could pose risks to domestic inflation levels in the coming months. Overseas Pakistanis continued to play a key role in supporting the country’s external sector performance. Remittances increased by 11.3 percent during July to January FY2026, reaching USD23.2 billion compared to USD20.9 billion during the same period last year. The minister described the rise as a strong indication of continued confidence among overseas Pakistanis in the national economy.
Discussing the broader economic landscape, Ahsan Iqbal stated that Pakistan’s economy has shown visible stabilization during the first eight months of the fiscal year. He attributed this progress to coordinated macroeconomic management designed to restore stability while laying the groundwork for sustained economic growth. The minister also addressed developments in the regional energy environment, noting that the region is currently experiencing a significant oil crisis that is affecting both developed and developing economies. He explained that uncertainty surrounding global oil prices remains high and the coming months will determine the extent to which energy costs could rise further.
In response to these risks, the minister encouraged citizens to adopt responsible consumption practices. He advised the public to limit unnecessary travel and suggested that families should consider using a single vehicle instead of multiple vehicles whenever possible in order to reduce fuel consumption.
Industrial performance also showed encouraging signals during the fiscal year period. The Large-Scale Manufacturing sector recorded a year-on-year growth rate of 4.8 percent during July to December FY2025–26, representing a major turnaround compared to the previous year’s performance. Out of 22 industrial sectors monitored, 14 sectors reported positive growth. Key sectors contributing to the improvement included automobiles which recorded growth of 67.2 percent, non-metallic mineral products which grew by 10.5 percent, beverages which expanded by 5.4 percent, wearing apparel with 7.5 percent growth, food products which grew by 0.6 percent, textiles at 1.5 percent, and tobacco with 8.7 percent growth.
The external sector also experienced notable activity during the period. Pakistan’s exports of goods and services reached USD24 billion during July to January FY2025–26, while imports increased to USD44.4 billion. The minister explained that the growth in imports was largely driven by higher demand for intermediate goods and capital equipment, as well as tariff rationalization measures designed to improve trade competitiveness and reduce distortions in import structures. Services exports posted strong growth as well, rising by 18.8 percent to reach USD5.7 billion. The expansion was largely supported by increased exports from the Information and Communication Technology sector, which recorded growth of approximately 20 percent. Meanwhile, services imports increased by 17.4 percent to USD7.7 billion, reflecting greater activity in remote digital services, financial services, transport services, and international insurance transactions. On the development spending side, the minister said that during July to February FY2025–26, development funds amounting to Rs585 billion were authorized while Rs403 billion were sanctioned, indicating steady progress in project execution. Utilization of the Public Sector Development Programme also improved during the period.
PSDP utilization during the first eight months of the fiscal year reached 36 percent of the total allocation of Rs1 trillion, equivalent to Rs361 billion. This represents a considerable increase compared to 20 percent utilization recorded during the same period last year when spending stood at Rs312.3 billion.
The planning ministry also continued to advance new development initiatives during the month. The Central Development Working Party approved four projects including position papers and recommended five additional projects to the Executive Committee of the National Economic Council for final approval.
According to the minister, the recently approved projects are expected to create approximately 18,366 direct employment opportunities along with around 7,320 indirect jobs across multiple sectors as development activity continues to expand nationwide. He further noted that the government’s focus on improving cost efficiency within development projects has produced measurable savings. During July to January FY2025–26, cost rationalization measures generated savings of approximately Rs9.9 billion.
Monitoring and evaluation of projects also remained an active component of the planning framework. During January 2026, sixteen projects were monitored and five projects were evaluated to ensure efficient implementation and alignment with targeted development outcomes. The minister also shared updates on Pakistan’s international economic engagements. Following the Pakistan–Kazakhstan Strategic Partnership Joint Declaration signed on February 4, 2026, authorities have initiated work on a five-year roadmap aimed at expanding economic cooperation between the two countries. A Joint Working Group was formed on February 23 and held its first meeting the following day to identify priority areas for trade and economic collaboration.
In addition, a virtual meeting with the Islamic Development Bank Group took place on February 16, 2026, focusing on the preparation of the Member Country Partnership Strategy for the period 2026 to 2030. The strategy will align with the government’s Uraan Pakistan initiative and broader national development priorities. Ahsan Iqbal also mentioned a meeting held in Dhaka on February 17, 2026 with the Prime Minister of Bangladesh. The discussion focused on strengthening bilateral relations between Pakistan and Bangladesh while exploring opportunities to enhance regional cooperation.
Concluding his briefing, the minister stressed that maintaining economic stability requires a collective national effort. He urged citizens, businesses, and institutions to play their part in supporting responsible economic practices so that Pakistan can navigate global uncertainties and continue strengthening its economic foundations.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem