Pakistan’s LSM growth signals broader economic recovery, says finance adviser

Pakistan’s economy is showing signs of strengthening, with a series of positive macroeconomic developments pointing to improved stability despite ongoing external and regional pressures, according to a message posted by Khurram Schehzad, advisor to finance minister, on the social media platform X.

“Recent key positive macro developments in Pakistan” highlight a turnaround in several critical indicators, Schehzad wrote.
Pakistan recorded its largest current account surplus in nearly a year at $427 million in February, following a previous surplus in March 2025, he said. At the same time, foreign direct investment rose 24% month-on-month, signaling renewed investor confidence.

Worker remittances also continued to strengthen, increasing 5% from the previous month and rising 11% year-on-year during the first eight months of the fiscal year. Meanwhile, exports from the country’s IT and technology sector reached $365 million in February, marking a 19% annual increase and pushing cumulative exports to around $3 billion, up 20% year-on-year.

Schehzad noted that Pakistan’s foreign exchange reserves have climbed to a four-year high, improving the country’s ability to cover imports. Industrial activity has also picked up pace, with large-scale manufacturing growing by about 12% month-on-month and 11% year-on-year in January, contributing to a cumulative expansion of 6% so far in the fiscal year.

Global oil prices, another key factor for the import-dependent economy, have softened, with Brent crude trading near $102 per barrel and WTI around $95. Futures markets are in backwardation, suggesting investor expectations of a decline toward the $60 range.

On the energy front, Pakistan has secured sufficient fuel supplies through March and most of April, improving stock levels and supporting uninterrupted economic activity, Schehzad added.

“Despite external and regional challenges, strengthening macro fundamentals are helping build buffers and a stronger foundation to face future challenges with greater resilience,” he wrote.