ISLAMABAD(The COW News Digital) Pakistan recorded a real Gross Domestic Product (GDP) growth rate of 3.7 percent in fiscal year 2026, signaling ongoing macroeconomic stabilization despite persistent global and domestic headwinds, according to the World Bank’s latest Pakistan Development Update 2026 report.
The findings highlight that core inflation in urban centers averaged 7.4 percent during FY 2025–26, reflecting moderate price stabilization across major urban markets. Concurrently, prudent fiscal management helped compress the consolidated fiscal deficit to 2.6 percent of GDP.
However, the report underscored significant cost-of-living pressures driven by substantial energy and fuel price adjustments between February and June 2026. During this period, petrol prices surged by approximately 36 percent, while high-speed diesel prices escalated by 31 percent. Liquefied Petroleum Gas (LPG) recorded a steep 46 percent increase, leading to a corresponding 30 percent spike in overall public transport fares across the country.
Despite domestic inflationary pressures, sound macroeconomic consolidation measures and improved fiscal indicators yielded international confidence. Major global credit rating agencies, including S&P Global and Moody’s, upgraded Pakistan’s sovereign credit ratings, acknowledging structural reforms and enhanced financial stability.
World Bank economists emphasized that while macroeconomic stabilization has taken root, sustaining long-term growth and lifting per-capita income will require accelerating broader structural reforms across energy, trade, and state-owned enterprises.
