PR OFIT S TA F F R E P O R T
Pakistan’s manufacturing sector grew by 6 6% in FY2025-26 up from 2% a year earlier driven by a 6 5% rebound in Large-Scale Manufacturing (LSM) during JulyMarch FY26 compared with a 1 9% contraction last year, alongside 8 5% growth in Small-Scale Manufacturing (SSM) and a 6 2% increase in slaughtering activities according to the Economic Survey 2025-26
Manufacturing and mining together contributed 13 5% to Pakistan’s gross domestic product Within the manufacturing sector, LSM accounted for 67 4% of total manufacturing output and 8 2% of
GDP Industrial activity gained momentum throughout the year, with LSM posting 11 1% growth in March 2026 compared with a 2 4% contraction in March last year The survey attributed the recovery to improving industrial activity after disruptions caused by import restrictions in previous years
The automobile sector recorded broad-based growth with passen-
is expected to contribute positively to the subsidiary’s future profitability Searle further disclosed that Nextar Pharma has also signed an in-principle agreement with Atco Laboratories Limited for the potential manufacture of selected biological products at the same facility According to the notice, the agreement with Atco Laboratories remains subject to the finalisation of commercial terms Once implemented, it is also expected to strengthen the subsidiary’s financial performance
WH E N Finance Minister Muhammad Aurangzeb presented his and the Shehbaz government’s third budget on Friday, it was not expected that it would afford much relief However while announcing a n 18 8 trillion budget, he also announced a reduction in the top income tax rate for the top slabs, and the abolition of supertax for both individuals and firms There have been none of the draconian taxation measures associated with previous budgets which may well be an indication that the government’s stabilization measures have begun to work However, there were no extravagant measures, either of relief or reform
The Budget tried to handle the uncompromising equation before it, because of the assumptions of growth and inflation it was making, not to forget the restraints placed on it by the National Finance Commission While one of the features of the budget was to get the provinces to receive their full NFC shares, but to pat back some, so that the Centre could meet some of the expenses that must be made One of the major expenses is defence, which reached Rs 3 trillion for the first time, but Senator Aurangzeb, referring to this, said that the country had been recognized as a power worldwide because of its success in Operation Bunyanum Marsoos (in 2025) and because of its role as a mediator between the USA and Iran in the ongoing crisis It is worth mentioning that like the rest of the world that crisis could well derail virtually all of the assumptions behind the Budget just presented The growth target of four percent is not very ambitious, but it could easily be cut if oil prices do not go down There seems to be some movement on a deal that allows the re-opening of the Hormuz Strait, but neither the USA nor Iran seem to heading towards a permanent settlement
Perhaps most important was the silence on the subject of the IMF With the current programme about to expire in a year, with only one budget on the programme ahead, and with the country still not out of the debt trap When this government took office with the programme stretching before it there were loud protestations that it would be the last programme The silence in this Budget Speech can only be described as deafening
Dedicated to the legac y of late Hameed Nizami Arif Nizami (Late)
Founding
M A Niazi
Editor Pakistan Today Babar Nizami Editor Profit
Himbalances As foreign exchange pressures intensify, economic growth slows stabilization measures are introduced and the cycle begins again
The persistence of this pattern suggests that the challenge is not merely financial it is structural
At its core, economic development is a process of expanding productive capacity This means increasing the ability of firms, workers, and industries to generate higher-value output over time Countries that successfully develop achieve this by continuously upgrading technology improving skills enhancing productivity and moving into more sophisticated forms of production
The importance of productive capacity extends beyond economics A strong production base creates employment opportunities, strengthens exports generates tax revenues supports innovation and improves resilience against external shocks It provides the foundation upon which sustainable prosperity is built
Manufacturing occupies a particularly important position within this process Unlike many forms of commercial activity, manufacturing combines labour, technology, capital, and knowledge to create value It encourages skill development stimulates supporting industries and promotes technological learning
This does not mean that agriculture and services are unimportant Both remain vital components of economic growth However, countries that have successfully transformed their economies have generally maintained a strong productive sector capable of generating internationally competitive goods and increasingly sophisticated exports
One of Pakistan s longstanding challenges is that productive investment often competes with more attractive short-term opportunities Trading, speculation,
The future of PakistanÊs economy will depend less on how
external debt increases, and economic vulnerability grows Pakistan has repeatedly experienced this pattern Periods of relative economic expansion are often accompanied by rising imports and growing external
will start thinking that their pain is relevant only in relation to their potential to pose threats to the power structure in place It is particularly true for those populations who live in areas that are prone to conflicts It is imperative that there needs to be a distinction between humanitarian obligation and political expediency There
its radar Communities that have endured years of conflict or displacement fall into oblivion when politics no longer find them interesting These are grave repercussions that have been created due to selective empathy Whenever people get to feel ignored and abandoned by the outside world, mistrust against the concerned institutions becomes inevitable They
invisibility sold as asset protection The film s most cutting observation is also its simplest: the people who create wealth are often the least able to protect it, while those who already possess it can afford entire industries dedicated to its concealment
S E C R E T N O 3: Panama was not a scandal It was a curriculum When the Panama Papers broke in 2016, ordinary Pakistanis did something I had not expected: they paid attention Not in the passive way that political news usually washes over us but with genuine sustained interest Television anchors who had spent years
The first is a schoolteacher who earns a modest salar y, files his returns dutifully because his employer deducts at source and there is no alternative , and recently submitted a written explanation to his bank about a cash withdrawal of Rs 50,000 over two months
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