By Ayesha Saba

Pakistan’s automobile sector recorded strong growth during the current fiscal year, with vehicle production increasing by 33.1 percent and sales rising by 31.9 percent, according to the Monthly Development Update released by the Ministry of Planning, Development and Special Initiatives

According to the update, the improvement in the automobile sector occurred alongside broader recovery in Pakistan’s industrial activity during FY2025-26.

Industrial recovery during the period was reflected in the performance of the large-scale manufacturing (LSM) sector, which recorded cumulative growth of 4.8 percent during July–December FY2025-26, compared with a contraction of 1.8 percent during the same period of the previous fiscal year.

The report indicates that the improvement in manufacturing activity signals an uptick in economic activity across several industrial sectors.

Industrial performance was also reflected in the Quantum Index of Manufacturing (QIM), which reached 128.5 in December 2025. The index recorded 0.4 percent year-on-year growth and 9.3 percent month-on-month growth, indicating a gradual increase in industrial production.

According to the report, 14 out of the 22 sectors included in the LSM index recorded positive growth, reflecting a broad-based improvement across multiple manufacturing industries.

Several sectors recorded notable expansion during the review period. The food sector grew by 10.6 percent, tobacco production increased by 8.7 percent, while wearing apparel expanded by 7.5 percent. The textile sector also posted growth of 1.5 percent.

Other industries showed significant gains, including non-metallic mineral products, which recorded growth of 510.5 percent, and the automobile sector, which posted an increase of 967.2 percent within the LSM index.

The report notes that improving industrial performance has also supported activity in sectors linked with construction and manufacturing, reflecting strengthening economic momentum during the fiscal year.

Overall, the Planning Ministry’s update indicates that Pakistan’s macroeconomic environment during the first eight months of FY2025-26 showed signs of stabilization, supported by coordinated policy measures, moderating inflation and improving industrial performance.

The Monthly Development Update presents developments across key sectors as part of its broader assessment of Pakistan’s macroeconomic landscape, including trends in inflation, industrial output, trade and remittance inflows.

Credit: INP-WealthPk