Finance: Resolving to reform

Pakistan enters the FY26 budget season at a critical crossroads — grappling with persistent vulnerabilities, yet infused with a renewed sense of resolve. The brief but consequential May 7–10 conflict with India has left a lasting imprint — not only on resource allocation but also on national sentiment. This moment, though born out of adversity, presents a unique opportunity for economic realignment. The FY25 economic performance presents a mixed picture. Pakistan’s economy expanded by 2.68 per cent, slightly higher than the 2.51pc growth recorded the previous year, but still falling short of the government’s 3.6pc target. The services sector, with an estimated expansion of 2.91pc emerged as the principal driver of growth, while agriculture stagnated and industry contracted. The GDP expanded to $411 billion, and per capita income rose modestly from $1,680 to $1,824.