ISLAMABAD: The Ministry of Planning and Development has approved the release of Rs141 billion under the Public Sector Development Programme (PSDP) for federal ministries and divisions for the first quarter (July–September) of the current fiscal year.
According to the ministry’s Monthly Development Update for August 2025, funds for Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) will be released twice a year due to seasonal constraints.
The Ministry of Finance had earlier issued a funds release strategy for the FY26 development budget, allocating 15% of the Rs1 trillion PSDP for July–September, 20% for October–December, 25% for January–March, and 40% for April–June. However, the Planning Ministry has objected to the low allocation in the first quarter, saying it slows down project progress.
Planning Minister Ahsan Iqbal has directed the Finance Ministry to increase first-quarter releases to 20% and cut the last-quarter share to 30% for steady project work throughout the year.
The Rs141 billion, about 14% of the total PSDP, was released in the third week of July. AJK and GB will continue to receive their funds on a biannual basis.
Economic Progress Report
Minister Ahsan Iqbal said Pakistan’s economy is now in a phase of stable growth, with positive trends in all major indicators in 2025. GDP is rising, inflation has eased, and both the external and fiscal sectors have stabilised.
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Exports grew by 17% in July, reaching $2.7 billion compared to $2.3 billion last year.
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The current account showed a $2.1 billion surplus in FY25, a major turnaround from a $2.1 billion deficit the previous year — the best in 22 years.
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Remittances rose by 7.4% in July to $3.2 billion.
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Fiscal deficit fell to 5.4% of GDP, the lowest in eight years, and the primary balance posted a surplus of 2.4% of GDP, the highest in 24 years.
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Development spending reached Rs1.068 trillion in FY2025, with a record 98% utilisation rate.
International agencies have recognised Pakistan’s progress. Barron’s called it a “macroeconomic miracle,” while Fitch, Moody’s, and S&P upgraded Pakistan’s ratings and outlook.
Inflation, Stock Market, and Trade
Inflation dropped sharply, with the Consumer Price Index (CPI) at 4.1% in July 2025 compared to 11.1% in July 2024. Annual inflation fell from 38% to 4%, a trend expected to continue.
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The Pakistan Stock Exchange crossed 141,000 points on August 1, helped by a new trade deal with the United States offering the lowest tariff rates in South Asia.
Agriculture, Development Projects, and Technology
For the first time, Pakistan collected detailed agricultural data through the 7th Agriculture Census 2024 to support food security and climate resilience policies.
In July, the Central Development Working Party (CDWP) approved eight major projects and referred three to ECNEC, expected to create over 2,000 jobs. Cost-saving measures in development projects saved Rs40 billion.
On July 31, 2025, Pakistan launched a Remote Sensing Satellite from China to improve agriculture monitoring, urban planning, disaster management, and climate change analysis. In 2026, Pakistan’s first astronaut will conduct scientific experiments in partnership with China.
