Private sector credit growth hits four-year high in FY26

August 03, 2026 (MLN): Pakistan’s private sector credit expanded by Rs1.46tr, or 14.8%, during FY26 to reach Rs11.38tr, marking the strongest annual increase in four years and the highest growth rate since FY22.

Business credit alone rose by Rs1.18tr (14%), accounting for over 80% of the overall rise in private sector credit and pointing to a pickup in financing for productive economic activity.

This was shared by Khurram Schehzad, Advisor to the finance minister, on his X account, who noted that nearly 89% of the increase in private-sector business credit was concentrated in three productive sectors: manufacturing, wholesale and retail trade, and agriculture.

According to the breakdown, manufacturing accounted for 56% of the increase, followed by wholesale and retail trade at 18% and agriculture at 15%.

Manufacturing alone drew Rs657bn in fresh credit, reflecting broad-based industrial expansion, while robust financing to trade and agriculture pointed to rising production, commerce and investment activity across the economy.

Private-sector credit is regarded as one of the clearest leading indicators of economic expansion, since businesses typically borrow to invest, expand capacity, modernize operations and prepare for future demand rather than merely to sustain existing operations.

The broad-based rise in financing across productive sectors was seen as reflecting strengthening business confidence, rising private investment, and the impact of macroeconomic stability, easing financial conditions and ongoing structural reforms.

The composition of credit growth was described as being as significant as its size, with financing increasingly flowing towards productive sectors that expand capacity, strengthen competitiveness and support Pakistan's transition towards a private sector-led, investment-driven, export-oriented and sustainable growth model.

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