Sending money home

The highest-ever home remittance inflows, exceeding $38bn, were recorded in FY25. In March, overseas Pakistan sent record high single month flows at $4.1bn. However, things were not as rosy on the trade front with the deficit rising by 9pc to $26.3bn. Increase in exports was a paltry $1.4bn to $32.1bn in FY25. Without sustainable export growth, the current account balance will remain propped up by remittances, which tend to be consumption-driven than productivity-enhancing.

Slow and steady rate cuts

10.5%

The policy rate fell from 13pc to 10.5pc over the year through gradual easing. With inflation stabilising at 5-7pc and reserves improving, the SBP opted to support growth. Businesses, however, are still waiting for a more decisive move into single-digit territory.

A sale at last

Rs135bn

Arif Habib won PIA’s privatisation auction with a bid for Rs135bn. This is the first major privatisation in nearly two decades, though the government has a pipeline of other state-owned enterprises that it plans to privatise over the next five years. As the finance minister has said repeatedly, the government has no business being in business.

IT’s silver lining

While exports may not have been doing well, information technology exports reached an all-time high of $386 million in October. From January to November, IT exports crossed $3.7bn. The target for FY26 is $5bn, of which $1.8bn has been achieved. This means the country will have to average roughly half a billion dollars in exports for the remainder of the fiscal year – a tall order but not undoable.

Golden glitters

The year brought gold highs, one after another. At the time of writing, December 24 saw a new record-high with 24-karat one-tola surging by Rs2,000 to Rs472,862. Whether the next year will continue to witness the gold rally largely depends on the dollar’s strength, global political turmoil, and US President Trump’s capriciousness.

Tariff threats

19%

Amidst the newfound bonhomie with US President Trump, the flood of tariffs imposed on the world slowed to a stream for Pakistan. Instead of the threatened 29pc, it faces tariffs of 19pc. While lower tariffs than competitors’ do open new avenues for exports, even this rate puts pressure on exports and may reduce them by around $0.5bn.

Lessons not learnt

Another year, another round of devastating floods. An AHL report estimates 2025’s losses to be $1.4bn, with the agriculture sector bearing the brunt of it at $1bn. Meanwhile, NDMA has warned that 2026’s monsoon season will be up to 26pc wetter with heat waves triggering glacial lake outburst floods.

Panda bonds

$250m

After delays, Pakistan is eyeing the launch of $250m equivalent Panda bonds in the Chinese capital market, as part of a $1bn targeted Panda bond programme. Currently scheduled for January, it would be the first time Pakistan has attempted to issue a sovereign foreign bond specifically targeting Chinese investors. This move may reduce dependence on US dollar-denominated borrowing and make room for trade in Yuan, especially under the CPEC framework.

Legitimising crypto?

From considering it illegal to creating a regulatory environment in hyperdrive, crypto has had a very interesting year in Pakistan. Binance has signed agreements with JazzCash and Fauji Foundation to explore collaborations across the crypto ecosystem. Will 2026 be the year that crypto is legal in Pakistan?

MNC flight

P&G’s exit sparked a debate about multinationals leaving Pakistan. Gul Ahmed’s closure of its export apparel segment and Careem’s suspension of its ride-hailing services added fuel to the fire. Whether the next year brings in foreign investment or is the continuation of the exit trend remains to be seen.

Electric future

Hubco plans to assemble BYD vehicles in Pakistan by late 2026. It is also laying out an EV charging network along highways. With over 2,000 cars sold, BYD’s vehicles can already be seen dotting the roads. There are national plans to develop lithium-ion batteries, while the Nishat Group has partnered with Chery Automobile to produce EVs. The mix of EVs and hybrids amidst ICE is expected to continue to rise in 2026 and beyond.

Published in Dawn, The Business and Finance Weekly, December 29th, 2025