The government of Pakistan claims that inflation is under control. The inflation rate stood at 9.6% in October, down from 10.3% in September. It has entered single digits, but is still close to the 10% mark.

The problem is that inflation was 6.2% in October 2025, a year earlier, while the average rate for the first four months of the current fiscal year was 10.05%. So, there is some good news, but the word “control” should be used carefully. When something rises from 6% to nearly 10% in a year, it may have slowed down, but it has not gone backwards.

Prime Minister Shehbaz Sharif talks about increasing exports, which is a welcome ambition. However, exports fell by 5.93% to $30.14 billion in fiscal year 2025-26. Meanwhile, imports rose by 8.14% to $69.76 billion, pushing the trade deficit to $39.6 billion.

The government had set an export target of $35.3 billion, but missed it by $5.2 billion. The annual trade deficit is more than twice the country's total official foreign exchange reserves.

The new export target is now $32.8 billion. And what about the dream of reaching $60 billion? It is still far away. Before that, Pakistan needs to cross the $35 billion mark, which was itself the government's target for the previous fiscal year.

The Federal Board of Revenue (FBR) collected around Rs13.003 trillion in fiscal year 2025-26, falling Rs975 billion short of the IMF target.

The FBR says it achieved its target. And technically, that is true. The government reduced the annual target from Rs14.131 trillion to Rs12.983 trillion, allowing the FBR to exceed the revised target by Rs21 billion.

This is an old trick in our system: when an examination paper is too difficult, lower the passing marks and declare everyone successful.

But how was the revenue shortfall managed? Through higher petroleum levy rates and major cuts in development spending. In other words, the gap was not filled by expanding the tax base. It was covered through higher charges at the fuel pump and cuts to the development budget.

The government collected around Rs1.5 trillion through the petroleum levy last year and plans to raise Rs1.7 trillion in the next fiscal year.

When it comes to economic growth, the World Bank has projected a growth rate of 3.8% for the current fiscal year 2026-27, which is a sign of improvement.

However, the same report says that Pakistan is home to 48% of the poor in the Middle East and North Africa region who live on less than $3 a day.

Pakistan's poverty rate has increased by 6.4 percentage points over more than six years. Even if the economy grows, the question remains: how much of that growth actually reaches ordinary people?

Fairness also requires us to hear the government's side of the story. The government says the economy will move towards recovery in fiscal year 2026-27. It points to remittances and stronger foreign exchange reserves as sources of support. It also expects reforms in state-owned enterprises and improvements in the tax system to strengthen economic stability.

It is also true that Pakistan has moved back from the brink of default. That is no small achievement.

So, is the economy finally taking off?

The aircraft is moving along the runway. Its engines are running, and those making announcements are pleased. But exports are falling, the trade deficit is growing, and tax targets keep being revised downwards.

The real test will come when the wheels finally leave the ground. Until then, it is better not to confuse speeding along the runway with actually taking off.

By Azhar Tiraj

Note: The views expressed by the blogger do not necessarily reflect the views of the organisation. — Editor