Lahore: Pak Elektron Limited released its Director's Review on August 28, 2026, highlighting both global and domestic economic developments that influenced its operations in the first half of the year. The report provides a comprehensive overview of the economic landscape and the company's performance amid varying international and local conditions.
Globally, the economy experienced a slight slowdown in the first half of 2026, with growth rates stabilizing at approximately 2.5% to 2.7%. This stability was attributed to steady job markets and consumer spending. However, the global economy faced headwinds due to ongoing trade disputes, high national debts in developing countries, and fluctuating energy prices, particularly influenced by tensions in the Middle East. Despite a drop in inflation compared to previous years, high fuel and borrowing costs led central banks to approach interest rate reductions with caution.
Regionally, economic performance varied, with North America remaining robust due to consumer spending and technological investments, while Europe and parts of Asia experienced slower growth. For the remainder of the year, businesses are advised to manage higher loan costs, adapt to changing supply lines, and leverage new technologies to enhance productivity.
Domestically, Pakistan concluded FY2026 on a strengthened macroeconomic footing, achieving a 3.7% real GDP growth—the highest in four years—bringing the total economy to $452.10 billion. The country's economic momentum was broad-based, supported by effective fiscal consolidation that resulted in a primary surplus of 3.5% of GDP. The improvements were bolstered by adherence to IMF program parameters, enhanced credit ratings, and successful capital market entries, which revitalized domestic investor confidence.
In the agricultural sector, growth reached 2.9%, aided by a significant 18.9% increase in agricultural credit disbursements to Rs. 2,457.9 billion and a 24.8% rise in farm machinery imports. These factors contributed to modernizing farming operations and stabilizing the sector following flood damages. However, while Urea offtake expanded by 31.9%, high market prices resulted in a 24.3% decline in DAP fertilizer usage.
Large-Scale Manufacturing (LSM) saw a robust recovery with a 6.4% expansion, contrasting with the previous year's 1.5% contraction. Growth spanned 16 out of 22 manufacturing sub-sectors, led by automobiles, food processing, wearing apparel, and petroleum products. Despite an 8.3% dip in LSM performance in April, the overall industrial trend signaled sustained recovery.
Inflation metrics presented a mixed economic climate, with CPI inflation accelerating to 11.7% year-on-year in May 2026. In response, the Monetary Policy Committee maintained the benchmark policy rate at 11.5% on June 15 to balance inflation management with economic stabilization. Money supply expanded by 9.2%, supporting commercial activities.
Fiscal and financial market performance showed marked improvement, with net federal revenues rising by 5.8% to Rs. 8,601.1 billion by April FY2026, driven by tax and non-tax collections. Disciplined spending cuts reduced total federal expenditure by 9.9% to Rs. 11,621.3 billion.
According to information available from the Pakistan Stock Exchange (PSX), capital markets maintained bullish momentum, with the KSE-100 Index reaching a record high of 180,301.70 points on June 30, 2026, elevating total market capitalization to approximately PKR 20 trillion. This reflects positive investor sentiment and confidence in the country's economic fundamentals.
The report underscores Pak Elektron Limited's strategic positioning and resilience in navigating both global and domestic economic challenges while capitalizing on growth opportunities.