Pakistan's economy is showing renewed signs of stability, with a combination of stronger external accounts, rising investment inflows and industrial recovery helping offset persistent regional and global uncertainties.
At the centre of this improvement is a notable turnaround in the external sector. The country recorded a current account surplus of $427m in February 2026-the largest since March 2025-reflecting improved balance-of-payments management.
Remittance inflows have remained a key pillar of support. Transfers from overseas workers rose by 5% on a monthly basis and 11% year-on-year during the first eight months of the fiscal year, sustaining external liquidity and domestic consumption.
Investment indicators also point to a recovery. Foreign direct investment increased by 24% month-on-month, suggesting a gradual return of investor confidence in selected sectors.
The technology sector continues to provide additional momentum. IT and related exports reached $365m in February alone, marking a 19% annual increase, while cumulative earnings approached $3bn over eight months, reflecting steady expansion in digital services.
Foreign exchange reserves have strengthened significantly, reaching a four-year high. This has improved import coverage and provided a buffer against external shocks, reinforcing overall macroeconomic stability.
Industrial activity is also rebounding. Large-scale manufacturing recorded double-digit growth in January, expanding around 12% month-on-month and 11% year-on-year. Over the fiscal year to date, output has grown by roughly 6%, indicating a broader recovery across key sectors.
Energy dynamics have provided some relief. International oil prices have eased, with benchmarks softening and futures markets signalling expectations of further decline. This has helped reduce immediate pressure on import costs.
At the same time, authorities have secured energy supplies for March and much of April, ensuring continuity in fuel availability. Conservation measures and careful planning have supported steady operations across the economy.
These gains come against a backdrop of ongoing external challenges, including regional tensions and global market volatility. Officials argue that improved macroeconomic fundamentals are helping build resilience and strengthen the country's ability to absorb shocks.
While the recent data points to a stabilising trajectory, the sustainability of this progress will depend on maintaining external balances, supporting investment and navigating uncertain global conditions.