Budget 2025-26: Pakistan sets economic growth target at 4.2%

ISLAMABAD: The Pakistan government has set economic targets for the upcoming Budget 2025-26 budget, ARY News reported on Monday, citing sources.

As per details, the government has set Pakistan’s economic growth target at 4.2% for the upcoming fiscal year. As part of broader macroeconomic planning, the inflation rate is proposed to be capped at 7.5%, signalling a cautious yet optimistic approach to fiscal management amid domestic and global economic challenges.

They further said, the agricultural sector is expected to play a key role in driving growth, with a proposed development target of 4.5% in budget 2025-26 budget. Within this sector, major crops are projected to grow by 6.7%, while cotton output is targeted to expand by 7%.

Livestock and forestry sectors have been assigned growth targets of 4.2% and 3.5%, respectively, whereas the fisheries sector is expected to grow by 3% in budget 2025-26.

For the industrial sector, a growth rate of 4.3% is proposed. Within this, large-scale manufacturing is expected to grow by 3.5%, while small-scale industries are projected to see a significant expansion of 8.9%.

The mining sector is targeted to grow by 3%, construction by 3.8%, and the electricity, gas and water supply sector by 3.5 per cent in budget 2025-26.

In the services sector, the overall growth target has been set at 4% for FY2025-26 budget.

Wholesale and retail trade is expected to increase by 3.9%, while transport and communications are projected to grow by 3.4%.

The hospitality and food services sector is anticipated to expand by 4.1%, information and communication by 5%, and financial services by 5%.

The real estate sector’s target has been set at 4.2%, while public administration is expected to grow by 3%. Education and health services are targeted to grow by 4.5% and 4%, respectively, in budget 2025-26.

On the investment front, the total investment-to-GDP ratio has been proposed at 14.7%, with public investment accounting for 3.2% and private investment at 9.8%. National savings are projected at 14.3% of GDP.