Pakistan eyes 4% growth target for FY2026-27 as planning committee reviews economic priorities

Pakistan’s Annual Plan Coordination Committee (APCC) is scheduled to meet Sunday to review the country’s economic performance and finalize development priorities for the upcoming fiscal year, with a 4% economic growth target likely to be proposed for FY 2026-27, according to official sources.

The APCC is expected to grant preliminary approval to a federal development budget of PKR 1.126 trillion and finalize recommendations for development allocations across various ministries and divisions for the next fiscal year, the sources said.

Federal Minister for Planning, Development and Special Initiatives, Ahsan Iqbal, will chair the meeting, which serves as a key forum for setting national economic and development priorities before the budget is presented.

According to sources, the committee will establish growth targets for major sectors of the economy, including agriculture, livestock, industry, services, minerals, forestry, construction and energy. The meeting will also review the performance of development projects and assess sectoral achievements during the outgoing fiscal year.

Officials said the government is unlikely to achieve its economic growth target of 4.2% for the current fiscal year. Instead, the economy is expected to expand by about 3.7%, reflecting mixed performance across sectors.

The agriculture sector is estimated to record provisional growth of 2.89% during FY 2025-26, while the industrial sector is projected to grow by 3.51%. The services sector, the largest contributor to Pakistan’s economy, is expected to post growth of 4.09%, according to sources familiar with the APCC deliberations.

Despite broader economic challenges, large-scale manufacturing has shown signs of recovery, with industrial output increasing 6.11% during the fiscal year, sources said.

The automobile sector emerged as one of the strongest-performing industries, recording a 61.66% increase in production compared with the previous year. The construction sector also posted growth of 5.73%, reflecting increased activity in infrastructure and housing projects.

In the agriculture sector, wheat production is estimated to increase to 29.6 million metric tons from 28.3 million metric tons during the current fiscal year. Rice production is expected to rise 2.8%, while sugarcane output is projected to increase 6.2%.

Cotton production, however, is expected to decline slightly. Output is estimated at 7.052 million bales, compared with 7.084 million bales a year earlier, highlighting persistent challenges facing the sector.

The APCC’s recommendations will be submitted to the government’s apex planning body for final approval before being incorporated into the federal budget for FY 2026-27.

Economic planners are expected to focus on sustaining growth momentum, boosting exports, strengthening industrial production and increasing investment in key infrastructure and energy projects as Pakistan seeks to consolidate recent macroeconomic gains and accelerate economic recovery in the coming fiscal year.