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Overseas employment surges 43% in September as 73,000 workers secure jobs abroad

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Overseas employment surges 43% in September as 73,000 workers secure jobs abroad

ISLAMABAD, Oct 27 (Wealth Pakistan) – Overseas employment for Pakistani workers rose sharply in September 2025, with 73,545 individuals securing jobs abroad — a 43 percent increase compared to August, according to the Finance Division’s Monthly Economic Update & Outlook (October 2025).

Strong demand from Gulf countries

The surge reflects continued demand for Pakistani labor in Gulf Cooperation Council (GCC) countries and the government’s efforts to expand overseas employment opportunities. The report said the overall migration trend remained robust during the first quarter of FY2026, providing a major boost to remittances and household income stability.

Saudi Arabia, the United Arab Emirates (UAE), and Qatar accounted for most of the new job placements, followed by Oman, Bahrain, and Malaysia. Employment opportunities were concentrated in the construction, hospitality, healthcare, and services sectors, where Pakistani workers continue to be in high demand.

Economic impact and remittance growth

Economists said the rise in overseas employment underscores Pakistan’s potential as a leading labor-exporting nation. They noted that every increase in foreign placements not only strengthens remittance inflows but also supports domestic consumption and economic resilience.

The Finance Division reported that remittances rose 8.4 percent to 9.5 billion dollars during the first quarter of FY2026, helping offset the trade deficit and strengthening foreign-exchange reserves. Monthly inflows crossed the 3 billion dollar mark for the third consecutive month in September, reaching 3.18 billion dollars.

Reforms and skill development

The government has accelerated reforms in the Bureau of Emigration and Overseas Employment (BEOE) to streamline visa processing and skill certification. It is also strengthening labor agreements with Saudi Arabia, the UAE, Qatar, and South Korea to diversify employment destinations for skilled and semi-skilled workers.

Vocational training programs under the National Vocational and Technical Training Commission (NAVTTC) and the Prime Minister’s Youth Programme have been expanded to equip workers with internationally recognized skills. The Finance Division said the expansion of skill certification programs would help Pakistan capture higher-paying job segments overseas.

Social protection and inclusive growth

Labor migration remains a key buffer against domestic unemployment, especially in Punjab, Khyber Pakhtunkhwa, and Azad Jammu and Kashmir — the main regions where workers originate. Overseas remittances continue to sustain rural economies and improve living standards for low-income households.

The report also highlighted ongoing social protection programs. The Pakistan Poverty Alleviation Fund (PPAF) disbursed Rs322.6 million in interest-free loans during September to over 5,000 beneficiaries, with total disbursements since 2019 reaching Rs120.7 billion. Similarly, the Benazir Income Support Programme (BISP) spent Rs14.6 billion during July–August FY2026, assisting vulnerable families across the country.

Economists said that rising overseas employment, combined with expanded social safety nets, is cushioning low-income households from inflationary pressures and job instability. They observed that remittances and social programs have helped sustain consumption and poverty reduction despite climate-related disruptions.

Outlook for FY2026

The Finance Division projected that if the current pace continues, Pakistan could exceed one million overseas job placements in FY2026, keeping annual remittance inflows above 40 billion dollars. It stressed that maintaining macroeconomic stability and exchange-rate transparency will be critical to sustaining this growth.

“The performance of overseas workers remains one of the most vital sources of economic stability and external sustainability for Pakistan,” the Finance Division said. “Continued facilitation and skill development will further strengthen this backbone of the national economy.”

Monetary conditions remain supportive as PSX hits record 166,000 points

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Monetary conditions remain supportive as PSX hits record 166,000 points

ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s monetary indicators remained broadly stable in the first quarter of FY2026, with inflation under control, liquidity sufficient, and the Pakistan Stock Exchange (PSX) reaching a historic high. The performance reflects renewed investor confidence in the country’s macroeconomic management.

Monetary indicators and liquidity trends

According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), the money supply (M2) contracted by 2.6 percent during July 1–October 3, 2025, compared with a contraction of 1.9 percent in the same period last year. The contraction was mainly driven by a reduction in net domestic assets (NDA), which fell by Rs1.245 trillion, while net foreign assets (NFA) increased by Rs173.8 billion.

The report said government borrowing for budgetary support had dropped sharply. Borrowing worth Rs2.04 trillion was retired, compared with Rs1.28 trillion last year. This decline freed up liquidity for private-sector lending and eased crowding-out pressures within the banking system.

Credit expansion and business sentiment

Private-sector credit posted moderate expansion, led by borrowing from manufacturing, telecommunications, and energy sectors. Economists said the trend indicated improving business confidence after a long period of monetary tightening and uncertainty.

At the same time, stable monetary conditions helped maintain balance in financial markets. The Finance Division noted that the combination of controlled inflation and declining interest rates created a conducive environment for economic activity.

PSX achieves historic gains

Pakistan’s capital market delivered outstanding results during the review period. The PSX gained 16,875 points in September, closing at 165,493 points. Total market capitalization rose by Rs1.6 trillion to Rs19.2 trillion. By October 22, the KSE-100 Index reached 166,553 points, marking the highest level in the exchange’s history.

“The surge in equity markets reflects improving investor sentiment following macroeconomic stabilization and a successful IMF review,” the Finance Division said. It added that stable inflation expectations, fiscal discipline, and external balance all contributed to stronger investor confidence.

Stable exchange rate and positive outlook

The report also highlighted that the rupee remained broadly stable against the U.S. dollar, while foreign-exchange reserves climbed to $14.5 billion by mid-October. Economists said the combination of steady prices, falling yields, and a strong equity market reflected the effectiveness of monetary management.

One analyst noted that markets are responding positively to policy clarity and discipline on both fiscal and monetary fronts.

The Finance Division stated that the monetary stance remained consistent with price stability and growth support. The State Bank’s real policy rate stayed positive, helping to anchor inflation expectations while supporting the recovery of business activity.

Policy outlook

Looking ahead, the Finance Division projected that continued stability in interest rates and the exchange rate would reinforce financial sector resilience. It said prudent monetary policy would remain central to Pakistan’s macroeconomic stability in the months ahead.

LSM expands 4.4% on auto and construction revival

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LSM expands 4.4% on auto and construction revival

ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s industrial sector continued to strengthen in the first quarter of FY2026 as large-scale manufacturing (LSM) grew by 4.4 percent, supported by strong performances in automobiles, construction materials, and electrical goods.

Key sector performance

According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), twelve major industries recorded positive growth during July–August FY2026. These included wearing apparel, non-metallic mineral products, food processing, electrical equipment, automobiles, and tobacco manufacturing.

In August 2025 alone, LSM grew 0.5 percent year-on-year, although output declined by 2.7 percent month-on-month due to seasonal adjustments and short-term supply constraints.

Automobile and construction boost

The automobile sector showed remarkable growth, with car production up 74 percent, trucks and buses up 105 percent, and jeeps and pickups up 48.7 percent during July–September. The surge was linked to improved supply chains, easing import restrictions, and rising consumer demand.

The construction industry also showed solid momentum. Cement dispatches rose 16.2 percent to 12.2 million tonnes in Q1-FY2026. Domestic consumption increased 15.1 percent, while exports jumped 20.8 percent to 2.6 million tonnes, reflecting strong infrastructure and housing activity.

Broader manufacturing recovery

The Finance Division said these indicators reflect renewed confidence in Pakistan’s manufacturing base, supported by better energy availability, policy continuity, and moderate inflation. It noted that industrial recovery continues to anchor overall economic growth.

Other industries such as food processing, apparel, and tobacco also recorded gains. Growing domestic and export demand supported higher capacity utilization, particularly in garments and knitwear, which maintained strong export performance.

Economic impact and outlook

Economists said the continued LSM recovery signals the early phase of industrial rebound after several years of slow performance. They added that if this trend continues, it could translate into job creation, increased tax revenue, and stronger economic growth.

The Finance Division highlighted that the industrial upturn was supported by steady credit expansion to the private sector, which helped firms finance working capital and modernization. Improved business confidence and macroeconomic stability also contributed to the higher output levels.

The report projected that industrial growth will continue in the coming quarters, driven by automotive demand, construction projects, and export-oriented manufacturing. It added that large-scale manufacturing will remain a key driver of Pakistan’s GDP growth in FY2026.

Inflation edges up to 5.6% in September after food and energy price spikes

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Inflation edges up to 5.6% in September after food and energy price spikes

ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s inflation rose to 5.6 percent year-on-year in September 2025, compared to 3 percent in August, mainly due to temporary spikes in food and energy prices following flood-related disruptions and tariff adjustments.

Monthly and quarterly trends

According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), the Consumer Price Index (CPI) for September showed moderate inflationary pressure. Annual inflation declined from 6.9 percent in the same month last year. On a month-on-month basis, prices increased by 2 percent compared to a 0.6 percent decline in August.

During July–September FY2026, inflation averaged 4.2 percent, significantly lower than 9.2 percent recorded in the corresponding period last year. The report said the latest increase largely reflected short-term food and energy price adjustments rather than structural inflation.

Category-wise price changes

Key contributors to the year-on-year CPI increase included education at 10.7 percent, health at 10.6 percent, clothing and footwear at 8 percent, and non-perishable food items at 6.5 percent. Smaller rises were observed in restaurants and hotels (6.1 percent), transport (4.2 percent), and housing, water, electricity, and gas (3.7 percent).

Meanwhile, declines were noted in perishable food items, which dropped 3.7 percent, and recreation and culture, down 2.7 percent. The Sensitive Price Indicator (SPI) for the week ending October 23 increased slightly by 0.22 percent, with 20 out of 51 items showing higher prices.

Factors behind the rise

The Finance Division said inflationary pressures were milder than initially expected given the flood impact. Supply chains recovered faster, and food availability improved, helping contain overall price growth. It added that inflation was expected to stay within the target range of 5–7 percent over the medium term.

Economists attributed the moderation to stable exchange rates, effective monetary management, and declining global commodity prices. One analyst noted that inflation was being managed effectively without hurting economic growth.

Outlook and risks

The report said consumer and business inflation expectations had eased, reflecting confidence in the government’s price stability measures. However, adjustments in energy tariffs remain a short-term risk.

The Finance Division projected inflation between 5 and 6 percent in October, citing easing food prices and steady fuel costs. It emphasized that continued fiscal discipline, stable reserves, and steady remittance inflows would help maintain price stability in the months ahead.

IMF program and global ratings upgrades reinforce Pakistan’s economic stability

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IMF program and global ratings upgrades reinforce Pakistan’s economic stability

ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s reform-driven recovery has gained international recognition following successful IMF reviews and rating upgrades by global agencies Fitch, S&P, and Moody’s. These improvements highlight renewed confidence in the country’s economic management and reform agenda.

IMF reviews and reform progress

According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), the completion of IMF reviews under both the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) reflects strong policy performance and commitment to structural reforms.

The report said Pakistan’s sovereign risk has declined sharply, with the credit default swap (CDS) probability dropping by 2,200 basis points over the past 15 months. The improvement results from prudent fiscal management, external stability, and disciplined monetary policy that have anchored investor confidence.

Rating agencies and sustainable finance

Fitch Ratings awarded Pakistan’s Sustainable Financing Framework an “Excellent” alignment score, confirming full compliance with international environmental, social, and governance (ESG) standards for green and social bonds. The Finance Division said this recognition positions Pakistan to attract more sustainable finance inflows.

At the same time, S&P and Moody’s also upgraded their outlooks for Pakistan’s economy, citing consistent reform efforts and improving debt sustainability. Together, these developments have strengthened the country’s image in global financial markets.

Improved macroeconomic indicators

The report highlighted several positive economic trends. The rupee has stabilized against the dollar, foreign exchange reserves have risen to 19.9 billion dollars, and inflation remains within the 5–6 percent range despite the lingering effects of flood-related disruptions.

The Finance Division said that the successful IMF review reaffirmed international confidence in Pakistan’s reform direction and macroeconomic discipline. It also provides a foundation for future program discussions aimed at sustaining fiscal and financial stability.

Impact on investment and borrowing costs

Economists said that IMF endorsement and ratings upgrades reduce Pakistan’s borrowing costs and improve access to international capital markets. They noted that stronger credibility helps ease debt rollovers and creates a safer environment for foreign direct investment.

The Finance Division added that the IMF’s assessment acknowledged progress in expanding the tax base, improving expenditure management, and enhancing monetary coordination. These measures have already contributed to a fiscal surplus of Rs1.5 trillion in July–August FY2026, compared to a deficit in the same period last year.

Focus on long-term growth

Officials said that the next phase of reform will target export diversification, competitiveness, and growth in renewable energy and digital sectors. They emphasized that the government is committed to transforming macroeconomic stability into sustainable, inclusive growth.

The Finance Division concluded that maintaining consistent policies remains crucial for consolidating recent achievements. It said that the IMF’s positive review and the global rating upgrades are clear signs of Pakistan’s reform momentum and resilience amid global economic uncertainty.

Global commodity price trends shape Pakistan’s inflation and import outlook

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Global commodity price trends shape Pakistan’s inflation and import outlook

ISLAMABAD, Oct 27 (Wealth Pakistan) – Global commodity prices have shown mixed trends, with easing energy and food costs expected to support Pakistan’s inflation outlook and external stability, according to the Finance Division’s Monthly Economic Update & Outlook (October 2025).

Global price movements

The report said the international energy price index fell by 0.5 percent in September, mainly due to a 5.2 percent drop in Australian coal prices. This was partially offset by a 2.2 percent increase in U.S. natural gas prices. Metal prices rose 2.9 percent, while precious metals surged 9.3 percent as investors sought safe-haven assets. Fertilizer prices continued to decline, and beverage prices remained largely stable.

The FAO Food Price Index averaged 128.8 points in September, slightly lower than in August, reflecting declines in cereals, dairy, sugar, and vegetable oils. The Finance Division noted that this moderation in global food prices would help offset domestic price pressures caused by temporary supply disruptions following recent floods.

Inflation outlook

“Global disinflation is creating a favorable environment for Pakistan to sustain low inflation,” the report said. Inflation in Pakistan averaged 4.2 percent during July–September FY2026, down from 9.2 percent a year earlier.

Economists said easing international energy prices would support Pakistan’s current account and fiscal position. One analyst told Wealth Pakistan that even a one-percent drop in global oil prices could save hundreds of millions of dollars in import costs.

Financing and external conditions

The report highlighted that the U.S. Federal Reserve’s recent policy rate cut, reducing its benchmark rate to 4.00–4.25 percent, could gradually ease global financing conditions. This would allow emerging markets like Pakistan to refinance external debt on more favorable terms.

However, the Finance Division cautioned that risks remain due to potential commodity shocks from geopolitical tensions and climate-related disruptions. It warned that “the global market remains vulnerable to supply shocks that could reignite inflationary pressures.”

Impact on Pakistan’s external sector

Pakistan’s external position remains stable, supported by strong remittance inflows and steady export growth. The current account posted a surplus of 110 million dollars in September, while foreign-exchange reserves held by the State Bank of Pakistan stood at 14.5 billion dollars by mid-October.

Economists said that the alignment between global and domestic price moderation could allow the central bank to maintain an accommodative stance without triggering inflation. A Lahore-based researcher said that stable food and energy prices give room for growth-oriented monetary policy.

Outlook and policy implications

The Finance Division concluded that global commodity stabilization, supported by fiscal prudence, has positioned Pakistan well for sustained disinflation and external balance. It stressed that continuous monitoring of international market trends would remain essential for maintaining price and exchange-rate stability.

Fiscal surplus recorded as revenues surge and expenditures stay contained

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Fiscal surplus recorded as revenues surge and expenditures stay contained

ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan posted a rare fiscal surplus during the first quarter of FY2026 as government revenues rose sharply and expenditures stayed within budgetary limits. The development reflects improved fiscal management and continued adherence to the IMF program.

Revenue performance strengthens

According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), net federal revenues increased 231.4 percent to Rs3,269.8 billion during July–August FY2026 compared to Rs986.7 billion in the same period last year.

The surge was driven by a 721.1 percent jump in non-tax revenues, along with a 14.1 percent rise in tax receipts collected by the Federal Board of Revenue (FBR). Non-tax inflows increased mainly due to higher profit transfers from the State Bank of Pakistan (SBP), dividends, defense receipts, the petroleum levy, the Gas Infrastructure Development Cess, and the Windfall Levy on crude oil.

During July–September FY2026, total FBR collections reached Rs2,884.4 billion, reflecting a 12.5 percent year-on-year increase.

Spending discipline and fiscal balance

The government maintained tight control over expenditures, which grew only 7.6 percent to Rs1,760.6 billion compared with Rs1,636 billion last year. As a result, the federal fiscal balance recorded a surplus of Rs1,509.2 billion, a major turnaround from a deficit of Rs648.8 billion in the same period last year.

The primary balance also improved significantly, reaching a surplus of Rs2,938.9 billion compared with Rs49.4 billion previously.

Alignment with IMF targets

The report said this improvement demonstrated the government’s commitment to maintaining fiscal discipline while managing flood-rehabilitation costs within the allocated budget. The performance remained consistent with IMF program targets and reflected the administration’s focus on sustainable revenue generation.

The Finance Division attributed the results to higher non-tax receipts, improved FBR enforcement, and reduced government borrowing. Contained budgetary borrowing also allowed banks to lend more to the private sector, supporting overall economic activity.

Outlook for fiscal stability

Fiscal experts said Pakistan’s stronger primary balance and controlled spending pointed to improving fiscal stability. However, they cautioned that future risks could emerge from potential increases in energy subsidies and liabilities of public-sector enterprises if reforms were delayed.

The Finance Division emphasized that continued fiscal discipline and reform implementation would be crucial for long-term debt sustainability. The improved fiscal outlook, together with external stability and moderating inflation, was expected to strengthen investor confidence.

It added that with better tax collection and strong non-tax inflows, Pakistan’s fiscal sustainability outlook had improved notably. Fiscal buffers were being rebuilt, creating fiscal space for targeted social protection and development investment.

“The government remains committed to prudent fiscal management and will continue to meet program targets under the IMF arrangement,” the Finance Division said.

Credit expansion, reduced government borrowing signal strengthening financial sector

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Credit expansion, reduced government borrowing signal strengthening financial sector

ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s financial system showed clear signs of strength in the first quarter of FY2026, supported by lower government borrowing, improved liquidity, and gradual expansion of credit to the private sector.

Decline in government borrowing

According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), government borrowing for budgetary support fell to Rs2.04 trillion compared with Rs1.28 trillion during the same period last year. The decline created more space for private-sector lending, signaling higher efficiency in the financial system.

Private-sector credit showed early signs of recovery after a year of subdued activity. Borrowing for working capital and fixed investment improved, led by manufacturing, textiles, and telecommunications. The report noted that improved liquidity and easing inflation encouraged banks to increase financing for productive sectors.

Stable financial intermediation

The Finance Division said financial intermediation remained stable, backed by healthy deposits and low non-performing loan ratios. The currency-to-deposit ratio stood at 37.6 percent, suggesting moderate preference for cash holdings.

Economists observed that reduced dependence on domestic financing reflected progress in fiscal consolidation. They said this shift from public borrowing to private credit would strengthen growth. One economist told Wealth Pakistan that this trend indicates improved confidence in Pakistan’s banking and credit markets.

Reforms and digital banking

The report also highlighted several ongoing reforms in the financial sector. These include the rollout of digital banking initiatives, expansion of SME finance, and the introduction of new credit channels for small businesses. These measures, along with stable interest rates, are expected to stimulate further credit growth in the coming quarters.

Outlook for sustainable recovery

According to the Finance Division, a stronger financial sector will play a vital role in supporting Pakistan’s macroeconomic recovery. It added that maintaining a balance between fiscal consolidation and private credit expansion will be key to sustaining growth in FY2026 and beyond.

BISP beneficiaries to get direct access to funds through ATMs

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BISP beneficiaries to get direct access to funds through ATMs

By Ayesha Saba
ISLAMABAD, Oct 27 (Wealth Pakistan) — The Benazir Income Support Program (BISP), backed by the Ministry of Information Technology and Telecom (MoITT) and the State Bank of Pakistan (SBP), is set to launch a digital wallet that will allow beneficiaries to access funds directly through ATMs, Point-of-Sale (POS) agents, and mobile apps.

The wallet will run on free, biometrically verified SIMs that will be distributed from November 17 this year. The initiative marks a key milestone in Pakistan’s transition toward digital financial inclusion.

Digital framework and supervision

According to documents available with Wealth Pakistan, the SBP will regulate the system while MoITT, working through PTA and telecom partners, will ensure smooth digital infrastructure and connectivity.

At present, BISP disburses Kafaalat stipends via six Partner Financial Institutions (PFIs). Each beneficiary is tied to one bank, restricting access to that bank’s POS network. This setup, though effective, has created accessibility issues in rural and remote areas.

Phased migration to interoperable wallets

To improve convenience, BISP will shift to digital wallets in two phases. In the first, it will link all six partner banks. In the second, it will expand access to other financial institutions across the country.

To achieve this, BISP will select a Payment Service Provider (PSP) through open bidding under PPRA rules. The chosen PSP will develop an interoperable system, manage interbank settlements, and allow cross-bank withdrawals. As a result, beneficiaries will be able to withdraw funds from any participating bank’s BVS-enabled POS, ATM, or cash center.

Legal and financial safeguards

BISP’s Legal Wing will ensure all contractual arrangements comply with relevant regulations. Meanwhile, its Procurement Wing will finalize the PSP’s engagement as a commercial partner.

Importantly, beneficiaries will not bear additional costs. BISP will cover all interoperability-related expenses to ensure full payments reach recipients. The new system will enhance transparency, speed up transactions, and reduce dependency on local agents.

Expanding digital access nationwide

The interoperable system is expected to simplify fund access, particularly for beneficiaries in far-flung areas. It will also create real-time audit trails and improve accountability in fund distribution.

BISP’s Social Protection Wallets initiative supports the government’s goal of building a cashless and inclusive economy. It aims to provide 10 million families with CNIC-linked digital wallets for direct, traceable, and secure payments.

A senior BISP official told Wealth Pakistan that the program seeks to promote dignity and accessibility.

“Through Social Protection Wallets and the interoperable payment system, BISP aims to ensure that every beneficiary can access entitlements with safety, transparency, and ease,” the official said.

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