Pakistan has set a target of 4% economic growth for fiscal year 2026-27, citing anticipated recovery in agriculture and large-scale manufacturing, higher private-sector investment and stronger services-sector performance to sustain the country’s economic rebound.
According to official planning documents, the government’s ambitious growth target—lower than its target of 4.2% for last year—aims to consolidate macroeconomic stability while generating employment and attracting investment.
Under the proposed annual plan, commodity-producing sectors are expected to grow by 3.9%, supported by a 3.8% expansion in agriculture and a 4.5% increase in large-scale manufacturing. Agriculture, which remains a key pillar of Pakistan’s economy, is projected to benefit from a recovery in major crops, targeted to grow by 3.6%, while cotton ginning is expected to expand by 2.5%. The livestock sector, which contributes the largest share within agriculture, is projected to post growth of 3.9%.
The industrial sector is targeted to grow by 4%, driven primarily by a revival in large-scale manufacturing activity. Growth is also expected to come from mining and quarrying, construction, and utilities, including gas and water supply services.
The services sector, which accounts for the largest share of Pakistan’s gross domestic product, is projected to expand by 4.2% during FY2026-27.
According to the plan, wholesale and retail trade is expected to grow by 4.2%, while transport, storage and communications are projected to expand by 3.7%. Financial services are targeted to grow by 4.5%, while information and communication services are expected to remain one of the fastest-growing segments of the economy with projected growth of 7.7%.
Officials cautioned that achieving these growth objectives would depend on effective macroeconomic management, policy continuity and a stable external environment. The government has also outlined ambitious savings and investment targets aimed at strengthening economic fundamentals and reducing reliance on external financing.
National savings are projected to reach 14.3% of GDP in FY27, while total investment is targeted at 15% of GDP. The resulting savings-investment gap is expected to be financed through relatively modest external inflows.
Public investment, including spending by the general government, is projected to remain at 3% of GDP. Private investment, however, is expected to increase to 10.3% of GDP, reflecting improved business confidence and a more stable macroeconomic environment.
Inflation is targeted at 8.2% during the fiscal year, with policymakers expecting fiscal consolidation measures and continued macroeconomic stabilization to help contain price pressures. The external sector is expected to remain a key challenge for the economy.
Planning documents noted that easing of import restrictions and scheduled external debt repayments could place pressure on Pakistan’s balance of payments and contribute to a widening current account deficit. However, authorities expect strong workers’ remittances, a recovery in exports and anticipated external financing inflows to offset some of those pressures and help maintain external sector stability.
Alongside growth and investment targets, the government has placed significant emphasis on employment generation. The annual plan projects the creation of 2 million jobs during FY2026-27, supported by higher levels of investment and stronger economic growth.
Officials said public-sector investment is expected to stimulate additional private-sector investment, creating employment opportunities across multiple sectors of the economy.
Federal and provincial employment generation initiatives are also expected to contribute by improving labor-force participation, promoting entrepreneurship, enhancing technical skills and strengthening job-matching mechanisms. According to the projections, the services sector is expected to account for the largest share of new employment, generating around 1.1 million jobs during the fiscal year.
The industrial sector is projected to create approximately 500,000 jobs, while agriculture is expected to add another 400,000 jobs.
The government said the projected increase in employment would support broad-based and inclusive economic growth, while helping ensure that the benefits of economic expansion translate into greater job creation and income opportunities across the country.
The growth, investment and employment targets are expected to be considered as part of Pakistan’s annual development and economic planning framework for FY2026-27, as authorities seek to build on recent stabilization gains while addressing longstanding structural challenges facing the economy.