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Pakistan's economy grew 3.71 percent in Q1 FY26 (July-September), up from 1.56 percent last year but down from the prior quarter's 6.17 percent due to weak demand and floods. Industrial output surged 9.38 percent, agriculture rose 2.89 percent despite crop declines, and services increased 2.35 percent. SBP projects 4 percent FY26 growth, with the government targeting 4.2 percent.

China’s aerospace firm PIESAT is strengthening artificial intelligence and space cooperation with Pakistan after showcasing satellite, drone and remote-sensing technologies at the AI Rise Expo 2025 in Islamabad. The company is working with SUPARCO on a 2.9 billion yuan ($400 million) satellite network deal that includes a local satellite manufacturing facility and an integrated system for real-time communications and remote sensing. Officials say the partnership aligns with the government’s “Uraan Pakistan” vision to drive technology-led growth and support services such as disaster management, agriculture monitoring and urban planning.

Pakistan plans to issue its first Panda Bond in China's markets, signaling maturing bilateral ties, Finance Minister Muhammad Aurangzeb told CGTN. He highlighted $17 billion in trade, CPEC Phase-II's launch focusing on asset monetization and B2B deals, and investment in agriculture, minerals, AI, and digital economy with knowledge transfer. The move strengthens the "all-weather" strategic partnership.

The Federal Board of Revenue (FBR) sealed two sugar mills in central Punjab for violating sales tax laws, including Section 40C of the Sales Tax Act, 1990, and related rules mandating sugar sector monitoring. In parallel, FBR suspended six officials for unauthorized absence from monitoring duties, initiating disciplinary action to enforce accountability. These steps underscore FBR's zero-tolerance policy on tax non-compliance and internal misconduct, aiming to protect revenue and ensure transparency.

U.S. companies are increasingly turning to Pakistan as a potential supplier of antimony, a critical mineral used in defence and technology industries, according to the Financial Times. Rising concerns over China’s control of global mineral supply chains have led American firms to explore partnerships in Pakistan. Deals involving Himalayan Earth Exploration, Nova Minerals, and the Frontier Works Organisation signal growing U.S. investment interest in the sector. Although Pakistan holds a small share of global antimony reserves, experts see the trend as an opportunity to expand local mining capabilities and strengthen U.S.–Pakistan economic ties.

Commissioner Lahore Marryam Khan chaired a RUDA meeting to review ongoing and planned development projects along the River Ravi, including 16 river drainage packages, embankment works, Ravi City and bridge schemes from Syphon to the Railway Bridge and up to the M-2 Motorway. She directed the district administration to manage revenue matters along the river belt and ordered strict legal action against illegal sand extraction without permits. The commissioner praised the cooperation of Lahore and Sheikhupura administrations, noting that RUDA and CBD projects are key regional development initiatives requiring close inter-departmental coordination.

Rawalpindi Ring Road Phase 1, now estimated to cost PKR 50 billion, has been delayed, with its completion deadline pushed from December 2025 to March 2026 and about 75% of work done so far. The 38.6km stretch from Banth Mor to Thalian Interchange faces construction and land acquisition hurdles, especially for upgrading Thalian into a broad-based interchange. The cost has risen from PKR 33 billion due to scope revisions, and officials warn the interchange works may extend beyond March 2026. A feasibility study and PC-I for Phase 2, from Thalian to GT Road (M-5), are also due by March 2026.

Government borrowing from banks has risen to Rs672 billion in the first half of FY26, reversing last year’s debt retirement trend. The State Bank of Pakistan reports that 86 per cent of the fiscal deficit is financed through banks, limiting liquidity for the private sector. Analysts expect higher borrowing in the second half due to revenue shortfalls. Despite increased dividend transfers of Rs2.7 trillion in FY25, reliance on domestic sources remains high as external funding lags. Meanwhile, the World Bank has approved $700 million under a $1.35 billion initiative to help Pakistan strengthen fiscal management and boost public sector efficiency.

PIA’s privatisation moves ahead on December 23, with three bidders still competing after Fauji Fertiliser’s withdrawal. The bidders will submit and open bids the same day under a live-televised process, seeking a 75pc stake, while 25pc shares remain with the government. The winning bidder will pay in two tranches and assume key liabilities, with no layoffs allowed for one year and staff benefits protected.