Pakistan has missed two major economic targets in the current fiscal year, as investment levels remained stagnant while national savings declined further despite ongoing efforts to boost growth and attract foreign capital.

Provisional data prepared by the Planning Ministry using National Accounts figures shows that the investment-to-GDP ratio stayed at 14.4 percent in FY2025-26, falling short of the 14.7 percent target set by the government.

Similarly, the savings-to-GDP ratio dropped to 14 percent, below the official target of 14.3 percent.

Overall fixed investment remained at 12.7 percent of GDP, also missing the budget target of 13 percent. Within this, private sector investment rose slightly to 9.6 percent but still remained below the projected 9.8 percent, while public sector investment declined to 3.1 percent following a reduction in development spending.

The slowdown comes amid continued reliance on external borrowing, as Pakistan has struggled to attract substantial non-debt foreign investment. Exports also recorded a decline of over 6 percent during the first ten months of the fiscal year.

The Special Investment Facilitation Council, set up to streamline investment processes, has so far been unable to generate significant foreign inflows despite reforms aimed at improving investor access and reducing bureaucratic hurdles.

Meanwhile, policymakers are reviewing trade liberalization measures after early indications suggest that import growth has outpaced export gains under the first phase of reforms.

The overall economic picture is further strained by weaker-than-expected growth. The economy expanded by 3.7 percent during the fiscal year, a rate widely viewed as insufficient to support rising labor market demand.

Long-term demographic projections also add pressure, with estimates suggesting Pakistan’s population could increase significantly by 2050, placing additional strain on employment, investment, and economic capacity.