As we enter the year 2026, it is time to review the year 2025 and wish you all Happy New Year 2026! May it bring peace, prosperity and happiness to all!!
The year 2025 saw Pakistan defeat a brazen Indian attack on its soil, while reviving its economy and fighting increasing terror. Pakistan's successful response to multiple serious challenges in 2025 helped significantly raise its geopolitical profile with improved ties with the United States and stronger relations with its friends in China, Russia and the Middle East. Pakistan’s GDP crossed the $400 billion mark in 2025. The year ended with Pakistani currency stable and the KSE-100, the key Pakistani stock market index, achieving new record highs with over 50% annual return in US dollar terms for investors. Privatization efforts gained steam with the sale of the PIA, the debt-ridden money-losing state-owned national airline, to private Pakistani investors. The political issues between the rulers and the opposition remained unresolved while PTI chief Imran Khan and his wife were sentenced to long jail terms. Taliban and Baloch terrorist groups stepped up their attacks on both civilian and military targets in the country. Pakistan has accused the Afghan Taliban of harboring these terrorist groups with India's backing.
Indian Aggression in May 2025:
On May 7, 2025, the Indian military launched an unprovoked attack on civilian targets in Pakistan after alleging without evidence that the terrorist attack in Pahalgam in the Indian Occupied Kashmir was carried out by groups based in Pakistan. The Indian attack was met with a robust Pakistani response in which multiple Indian fighter jets, including recently acquired Rafales, were shot down, leading to the grounding of the entire Indian Air Force for 48 hours. The fighting was halted within 4 days after mediation by the US President Donald J. Trump.
India's diplomatic efforts to isolate Pakistan by attempting to persuade the international community that Pakistan bore responsibility for Pahalgam failed miserably as the world demanded evidence which New Delhi could not produce. Azerbaijan, China and Turkey stood firmly with Pakistan, while India stood alone. Neither the US nor Russia came to India’s support.
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| High Optimism in Pakistan for 2026. Source: Gallup International |
Pakistan's Geopolitical Gains:
Pakistan's success in what India dubbed Operation Sindoor was widely recognized by independent analysts and international media. President Trump talked about India's losses and a US government report referred to Pakistan's military successes against India.
Pakistan’s arm sales soared as the world learnt how the Pakistani military successfully used its indigenous defense gear, including drones and rockets, in the May conflict with India.
The Chinese celebrated the combat performance of their J-10C fighter jets and PL-15 air-to-air missiles used by the Pakistan Air Force against Indian military jets. Saudi Arabia signed a mutual defense pact with Pakistan after the Israeli Air Force struck in Doha, Qatar and the US government did nothing to help the country that hosts the largest US military base in the region.
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| Pakistan GDP FY 2008 to FY 2025. Source: PBS and AKD |
Pakistan's Economic Revival:
Pakistan's economy stabilized with its currency stability and investor confidence. Pakistan’s gross domestic product (GDP ) reached $411 billion in June, 2025, rising 6.2% in April-June quarter. It slowed to 3.7% as floods hit parts of the country in the July-September quarter. The key stock index KSE-100 closed at record highs with 52% annual gain in US dollar terms. Large scale manufacturing grew with 8.3% in Oct 2025, driven by automobiles, construction, textiles, and petroleum. About 36,000 new retail trading accounts were opened in the September quarter, compared to 23,600 new registrations just three months ago, according to Topline Securities, a brokerage house in Pakistan. Broad and deep participation in capital markets is essential for economic growth and wealth distribution in any country.
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| Pakistani Rupee Performed Better Than Indian/Sri Lankan Currencies in 2025 |
Pakistan's arms exports soared with multi-billion dollar orders for its fighter jets, trainer aircraft and drones. Azerbaijan, Sudan, Libya and Turkey purchased Pakistan-made defense equipment.
The discovery of rare earth metals, particularly large deposits of antimony, a critical mineral, boosted Pakistan's potential in world trade of critical metals. Antimony's main uses are in flame retardants (as antimony trioxide in plastics, textiles), strengthening alloys (especially with lead for batteries, ammunition, bearings, cable sheathing, pewter), and in semiconductors (diodes, infrared detectors). It's crucial for military tech (night vision, explosives), improves battery performance, and is used in glass (clarifying agent) and ceramics, highlighting its role in critical defense and energy technologies. . The price of antimony trioxide has shot up to around $40,000 per ton — off its peak of more than $60,000 as some users seek alternatives but still substantially higher than $26,000 in September 2024 — as fears about China’s control of the supply chains for metals including antimony have sparked a global race to secure supplies.
Pakistan received commitments of billions of dollars in investments in its large copper and gold deposits. Copper's importance has dramatically increased with growth in electric vehicles, data centers and global power demand.
Pakistan Space Program:
In October 2025, China launched HS-1 satellite for Pakistan, its first hyper-spectral satellite which is equipped with advanced hyper-spectral imaging sensors capable of capturing data across hundreds of narrow spectral bands. The satellite lifted off from China’s Jiuquan Satellite Launch Center on a Kinetica-1 rocket. It is expected to boost Pakistan's national capacities in areas such as precision agriculture, environmental monitoring, urban planning, and disaster management. Its high-resolution data will support improved resource management and strengthen Pakistan’s resilience to climate-related challenges.
In addition to the HS-1 satellite, Pakistan has signed a $406 million deal with China’s PIESAT for a constellation of over 20 imaging and communication satellites, a move that signals a profound shift in its strategic posture, according to defense site Quwa. The deal includes a full transfer-of-technology (ToT) for in-country satellite manufacturing. It is poised to provide the Pakistani military with a sovereign, persistent imaging intelligence (IMINT) capability.
Pakistan's First AI Data Center:
Data Vault and Telenor Pakistan launched the nation's first dedicated AI data center in Karachi. It is designed to support startups, researchers, and government agencies with high-performance computing and GPU-as-a-service offerings. It is equipped with more than 3,000 Nvidia's highest performance H100 and H200 GPUs for which the Trump Administration issued export licenses. These GPUs cost from $40,000 to $60,000 each, making the Nvidia chips the biggest chunk of the investment made in this AI data center. Other data centers in Pakistan also support AI workloads but this new data center in Karachi is specially designed for AI. It puts the country on a short list of only a handful of nations with locally hosted AI data centers. Pakistanis rank among the world's top five users of Artificial Intelligence (AI) tools, securing the fourth spot among 21 nations surveyed by the Schwartz Reisman Institute.
Pakistan's Challenges in 2026:
Sustained economic recovery is the key challenge for Pakistan in 2026 and beyond. It is a difficult challenge amid unsettled issues with India and unresolved domestic political problems at home. Opposition leader Imran Khan and his wife have been sentenced to long jail terms by Pakistani courts. This situation, if left unresolved, is likely to continue to be a source of instability and poor economic performance. The other challenge is rising incidents of terror in the country with a 70% increase in terror attacks in 2025. Brute force alone will not resolve these issues. There's a need for talks to reach a political settlement with the Afghan Taliban who are harboring groups like the TTP and BLA that launch cross-border attacks in Pakistan.
Related Links:
Haq's Musings
South Asia Investor Review
Pakistan Downs India's French Rafale Jets in a Major Aerial Battle
Retail Investors Drive Pakistan Shares Higher
HS-1 Satellite: Pakistan's Eye in the Sky
Pakistan's Rising Arms Exports to Developing Nations
Pakistan Gets its First AI Data Center
West's Technological Edge in Geopolitical Competition
Modi's India: A Paper Elephant?
Pahalgam Attack: Why is the Indian Media Not Asking Hard Questions?
Ukraine's Lesson For Pakistan: Never Give Up Nukes!
Pakistan's Maritime Sector, Blue Economy
Pakistan's Sea-Based Second Strike Capability
Riaz Haq Youtube Channel
VPOS Youtube Channel
6 comments:
Wajahat Kazmi
@KazmiWajahat
It is fascinating to see Pakistan entering 2026 with so much optimism compared to the rest of the world. The latest Gallup data shows over half the country expects economic prosperity, which is significantly higher than the numbers coming out of India. Even hope for peace is double the global average. We haven't seen confidence levels this high in decades.
https://x.com/kazmiwajahat/status/2006422232386740366?s=61&t=mgTxrmITUbpo9NntN5677Q
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Majority of Pakistanis optimistic about 2026: Gallup survey
https://www.nation.com.pk/31-Dec-2025/majority-pakistanis-optimistic-2026-gallup-survey
A majority of Pakistanis remain optimistic about the year ahead, with more than half expecting economic and overall conditions to improve in 2026, according to a recent Gallup Pakistan survey.
The nationwide survey, conducted with a sample of 1,000 respondents, was part of a broader global study covering 60 countries, including Pakistan. The findings reflect stronger public confidence in Pakistan compared to global trends.
When asked whether 2026 would be better than 2025, 51% of respondents said they expected improvement, while 20% believed conditions would worsen. About 10% felt the situation would remain unchanged, and 19% did not respond.
Gallup Pakistan noted that optimism among Pakistanis is significantly higher than the global average. Worldwide, only 37% of respondents expressed hope for improvement, compared to 51% in Pakistan.
On the economic outlook, 53% of Pakistanis said they expect further improvement in the coming year, while 27% anticipated increased economic challenges. Another 10% predicted no change, and 10% did not offer a response.
The survey also highlighted optimism regarding global peace. Around 52% of Pakistanis believe the world will be more peaceful in 2026 than in 2025. In contrast, 21% foresee greater global instability, 19% expect no change, and 8% did not express an opinion.
Gallup Pakistan added that the proportion of Pakistanis hopeful for a more peaceful world is nearly double that of India and also exceeds the global average.
"The latest Gallup data shows over half the country expects economic prosperity, which is significantly higher than the numbers coming out of India.. Gallup Pakistan added that the proportion of Pakistanis hopeful for a more peaceful world is nearly double that of India and also exceeds the global average."
If hope and optimism were horses..
But yeah, good luck Pakistan for 2026. :)
Divided World Looks to 2026: Optimism in the Global South, Anxiety in the West and Among Older Generations
https://www.gallup-international.com/survey-results-and-news/survey-result/a-divided-world-looks-to-2026-optimism-in-the-global-south-anxiety-in-the-west-and-among-older-generations
Top 5 Most Hopeful Countries (Net Hope):
Kenya (+67), Syria (+61), Saudi Arabia (+58), South Africa (+52), Colombia (+45)
Bottom 5 Least Hopeful Countries:
Bulgaria (–36), Bosnia and Herzegovina (–28), Austria (–26), Belgium (–26), Ghana (–26)
Top 5 Most Economically Optimistic Countries (Net Prosperity):
Saudi Arabia (+54), Kenya (+47), Syria (+35), Colombia (+34), Pakistan (+26)
Bottom 5 Most Economically Pessimistic Countries:
Belgium (–59), France (–54), Latvia (–54), Ukraine (–54), Germany (–53)
Top 5 Most Optimistic About Global Peace (Net Peace):
Syria (+50), Kenya (+48), Saudi Arabia (+43), Peru (+41), Armenia (+33)
Bottom 5 Most Pessimistic About Global Peace:
Netherlands (–61), Germany (–59), Belgium (–57), Greece (–54), Ghana (–52)
A glance at this list and it is abundantly clear how little this means in real terms. War-torn Syria is more "hopeful" and "optimistic" than even Pakistan! Countries that are relatively stable and have achieved higher social and economic development are in fact more "pessimistic" about the future while countries that are just beginning to claw up from the edge of abyss - whether it be civil wars, political instability or prospect of economic bankruptcy - tend to be more "optimistic".
Start of Year 2026: Pakistan Records Higher Optimism Than Global Average, ahead of India on Economy (53% vs 39%), and Peace (52% vs 26%)
https://gallup.com.pk/post/39525
Start of Year 2026: Pakistan Records Higher Optimism Than Global Average, Ahead of India on Economy (53% vs 39%), and Peace (52% vs 26%)
A majority of Pakistanis (52%) believe the coming year will be better than the last—an optimism level that is higher than in most years recorded by Gallup Pakistan since 1994, surpassed only during a few peak periods, notably the late 1990s and the mid-2010s.
(Islamabad, Pakistan) The End of Year Survey conducted by the Gallup International Association covered 60 countries, including Pakistan, with a total sample size of 59,636 respondents. This annual survey is a long-standing tradition of the association, conducted consistently since 1978, and represents the largest global study of its kind carried out by independent polling organizations. In Pakistan, the survey has been implemented by Gallup Pakistan since 1994, ensuring continuity and comparability of public opinion trends over time.
Five key findings the End of Year Survey from Pakistan (measured since 1994):
More Pakistanis are optimistic (51%) than pessimistic (20%) about the year ahead, indicating a net positive outlook for 2026.
A majority of Pakistanis (53%) believe 2026 will be a year of economic prosperity.
Nearly 1 in 2 (52%) Pakistanis expect 2026 to be a more peaceful year for the world.
Pakistan is just beginning to emerge out of a sustained period of high political and economic instability that started with Imran Khan's ouster in 2022, his subsequent attempts to create a political upheaval inorder to return to power, the dilly-dallying by the succeeding PDM setup over signing up for yet an IMF bailout program etc. Now that things have settled down a bit with the IMF program in place and the Field Marshal firmly in control after having stamped out political opposition, it perhaps make sense for Pakistanis to start feeling "optimistic" again.
By comparison, India has been chugging along with its daily grind as it did not face any major political or economic crisis during the period. So Indians are inclined to be more "pessimistic" about the future.
In a nutshell, the "optimism" and "pessimism" here is relative to the prevailing or preceding domestic situation in the respective countries and cannot be compared to one another directly, just like how the "optimism" of Pakistan cannot be compared to "pessimism" in Austria.
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