Pakistan’s domestic demand recovery gains pace in FY27

August 31, 2026 (MLN): Pakistan’s domestic demand recovery continued into the start of FY27, with momentum strengthening across several major sectors, although the pace remained uneven, according to Khurram Schehzad.

In a post on X, Khurram Schehzad said FY26 showed a recovery in demand across several key sectors, with the trend continuing into the first month of FY27.

Automobiles remained the standout sector, with demand growing 30% in FY26 and accelerating to 42% YoY in July. He said the strong growth shows improving consumer confidence and financing conditions.

Petroleum demand also turned sharply positive after remaining broadly flat in FY26. It increased 23% YoY and 20% MoM in July, pointing to stronger mobility, transportation and economic activity.

Cement demand remained positive, rising 8% in FY26 and 6% YoY in July, consistent with improving construction and infrastructure activity.

Mobile-phone demand strengthened as well, increasing 9% YoY in July, alongside a sharp monthly rebound, indicating improving discretionary consumption.

Fertilizer remained the near-term exception, with demand declining 4% YoY in July after strong 17% growth in FY26, indicating some sector-specific softness following a strong year.

Khurram Schehzad noted that these are demand, sales and offtake indicators, while Large-Scale Manufacturing (LSM) measures industrial production. He said the two are increasingly reinforcing each other, with demand recovering while productive activity responds.

LSM grew around 5% in FY26, while improving private-sector credit and business confidence are also supporting the recovery.

Together, these trends suggest that economic expansion is becoming broader and increasingly visible across the real economy.

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