Pakistan's economy expanded by 3.7% in the first quarter of fiscal year 2026 despite devastating floods, as industry surged 9.4%, offering early evidence that stabilisation policies introduced in December 2025 are beginning to bear fruit. Launching the 'Monthly Development Report, January 2026,' Planning Minister Ahsan Iqbal attributed the improvement in key economic indicators to ongoing reforms aimed at restoring macroeconomic stability. The latest figures mark a sharp rebound from the 1.6% growth recorded in the same quarter of FY2025. Industrial performance led the recovery, while agriculture and services displayed relative steadiness, reinforcing broader resilience. Large-scale manufacturing, which had endured a two-year contraction, grew 5% between July and October 2025, signalling a turnaround in the production cycle. Inflationary pressures eased during the period. Price growth averaged 5.2% from July to December 2025 and stood at 5.6% in December, supported by improved availability of essential foo d items. The government, Mr Iqbal said, remains cautious in pursuing sustainable expansion. Revenue collection also improved. The Federal Board of Revenue amassed Rs6.2trn during July-December 2025, a rise of 10%. Overseas sales advanced 1% to $16.6bn during July-November FY2026, despite supply chain disruptions and flood-related damage. Remittances climbed 10.5%, reflecting what the minister described as overseas Pakistanis' confidence in economic stability. He linked sustained export growth to long-term improvement and noted recommendations under the 'Uraan Pakistan' initiative to declare an export emergency and adopt measures to expand outward shipments. Development spending progressed steadily. Of the Rs1trn Public Sector Development Program (PSDP), Rs356bn were allocated and Rs314.5bn sanctioned. Four projects secured approval in December, with three forwarded to the Executive Committee of the National Economic Council. These ventures are expected to generate around 3,000 direct and 64,500 indirect jo bs. Efficiency gains accompanied spending. Between July and November 2025, streamlined procedures saved Rs3.5bn in development expenditure. Reducing import dependence remains a priority. The government aims to achieve self-sufficiency in edible oil within five years by boosting domestic canola production. Imports of fuel, edible oil and tea account for a significant portion of foreign exchange spending. With technical assistance from the Food and Agriculture Organization, a new tea trade strategy seeks to cut imports by $650m annually and enhance exports through modern cultivation, processing and branding across more than 600,000 hectares. Beyond economic management, Mr Iqbal cited progress in other sectors. Pakistan participated in a high-level polio pledging ceremony in Abu Dhabi on December 9, 2025. Discussions with the US State Department are under way to deepen collaboration in education, science and technology. In cooperation with China, the government is working to secure 10,000 scholarships in art ificial intelligence to bolster higher education and address shortages in skilled human resources. He also confirmed that China has signed the minutes of the 14th Joint Cooperation Committee meeting under the China-Pakistan Economic Corridor framework, underscoring continued engagement on major projects. Looking ahead, the minister stressed the need for comprehensive energy-sector reforms over the next two years, including efforts to lower electricity tariffs. Declaring 2026 as the year of institutional reform, he said the government intends to lay a stronger foundation for development by 2027 through structural adjustments and enhanced policy discipline.