Pakistan’s FY26 GDP growth revised down to 3.65 pc, Q4 slows to 2 pc

ISLAMABAD: Pakistan’s economic growth was revised down to 3.65 per cent for the fiscal year ended June 2026 from an earlier estimate of 3.70 per cent, while growth slowed to 2 per cent in the final quarter, with a sharp contraction in industry weighing on overall activity, official data showed on Monday.

The National Accounts Committee (NAC), which met at the Pakistan Bureau of Statistics (PBS) headquarters in Islamabad, also revised the country’s economic growth for FY2024-25 to 3.11 per cent from 3.18 per cent estimated previously.

The latest annual estimates show agriculture growing by 3.50 per cent in FY2025-26, up from the earlier estimate of 2.89 per cent. Industrial growth was revised down to 3.34 per cent from 3.51 per cent, while growth in services fell to 3.81 per cent from 4.09 per cent.

The committee also revised quarterly growth estimates for the first three quarters of FY2025-26, raising the second- and third-quarter figures while making a slight downward adjustment to the first quarter.

The economy expanded by 3.89 per cent in the first quarter, 4.31 per cent in the second and 4.42 per cent in the third, compared with previous estimates of 3.92 per cent, 4.05 per cent and 3.99 per cent, respectively.

The slowdown in the fourth quarter, when growth fell to 2 per cent from 6.07 per cent in the same period a year earlier, reflected a sharp reversal in industrial activity, particularly electricity, gas and water supply.

Economy reaches $450.4 billion

Pakistan’s economy was valued at Rs126.4 trillion, or $450.4 billion, in FY2025-26, compared with Rs114.9 trillion, or $408.7 billion, in the previous fiscal year, according to the revised national accounts.

Per capita income stood at Rs531,897, equivalent to $1,896.

The NAC approved the incorporation of revised import data into national accounts estimates for FY2020-21 to FY2024-25, alongside updated annual estimates for FY2024-25 and FY2025-26 and revised quarterly figures for the latest fiscal year.

The committee, chaired by the secretary of the Ministry of Planning, Development and Special Initiatives, also reviewed changes in the performance of agriculture, industry and services following revisions to annual benchmarks and updated sectoral indicators.

FY2024-25 growth revised to 3.11 per cent

The committee revised economic growth for FY2024-25 to 3.11 per cent from 3.18 per cent estimated at its previous meeting.

Agricultural growth was adjusted down to 1.32 per cent from 1.53 per cent, mainly because of a downward revision in forestry.

Industrial growth was revised to 5.46 per cent from 5.56 per cent. Mining and quarrying contracted by 4.01 per cent, compared with the earlier estimate of a 3.73 per cent decline, while growth in electricity, gas and water supply was revised to 28.87 per cent from 29.60 per cent.

Services growth was adjusted marginally down to 3.13 per cent from 3.14 per cent. Wholesale and retail trade growth was revised to 0.27 per cent from 0.48 per cent, while transport and storage improved to 2.87 per cent from 2.54 per cent.

Agriculture leads annual improvement

Agriculture’s growth estimate for FY2025-26 was raised to 3.50 per cent from 2.89 per cent, supported by improved production of important crops and stronger performance by other crops.

Growth in important crops was revised to 1.59 per cent from 0.65 per cent, reflecting improvements in wheat and maize production.

Other crops grew by 4.28 per cent, compared with the previous estimate of 2.43 per cent. The PBS attributed the improvement to higher production of pulses, fruits, tomatoes, oilseeds and green fodder.

Pulse production increased by 6.3 per cent, oilseeds by 5.4 per cent, tomatoes by 44 per cent, fruits by 1.3 per cent and green fodder by 2.4 per cent.

Livestock growth edged down to 3.71 per cent from 3.75 per cent, which the committee attributed to increased fodder inputs. Forestry expanded by 10.80 per cent, while fishing grew by 1.39 per cent.

Agriculture also recorded growth of 3.71 per cent in the fourth quarter, compared with 0.58 per cent in the same period a year earlier.

During the quarter, important crops grew by 2.21 per cent and other crops by 2.62 per cent. Pulse production increased by 39.6 per cent, tomatoes by 14 per cent, fruits by 4.1 per cent and green fodder by 0.3 per cent.

Livestock, forestry and fishing recorded growth of 3.92 per cent, 14.96 per cent and 1.33 per cent, respectively, in the final quarter.

Industrial growth slows to 3.34 per cent

Industrial growth was revised down to 3.34 per cent for FY2025-26 from the earlier estimate of 3.51 per cent, although mining and quarrying performed better than previously expected.

Mining and quarrying recorded growth of 1.52 per cent, compared with the previous estimate of 0.38 per cent. The improvement was attributed to higher output of gas, crude oil and coal, which grew by 2.84 per cent, 5.12 per cent and 2.73 per cent, respectively.

Large-scale manufacturing growth, measured through the Quantum Index of Manufacturing, was revised down to 5.01 per cent from 6.11 per cent.

The automotive industry recorded growth of 57.77 per cent, while transport equipment expanded by 42.36 per cent. Other industries registering growth included furniture, up 22.69 per cent; rubber products, 14.19 per cent; electrical equipment, 14.25 per cent; tobacco, 12.61 per cent; petroleum products, 9.7 per cent; and food, 7.03 per cent.

Football manufacturing, classified under other manufacturing, grew by 16.62 per cent.

Several industries, however, contracted. Pharmaceutical products declined by 8.87 per cent, iron and steel products by 7.84 per cent, chemicals by 2.53 per cent and leather products by 1.95 per cent.

Electricity, gas and water supply recorded a contraction of 10.24 per cent for the fiscal year, compared with the previous estimate of 10.63 per cent. The improvement was attributed mainly to increased output from distribution companies.

Construction growth was revised upwards to 6.30 per cent from 5.73 per cent, which the committee linked to higher public-sector construction expenditure.

Services growth revised down

Services growth was revised to 3.81 per cent from 4.09 per cent, although all constituent sectors continued to expand.

Information and communication recorded growth of 9.53 per cent, up from the earlier estimate of 7.52 per cent. Financial and insurance activities grew by 4.23 per cent, compared with the previous estimate of 0.32 per cent, reflecting an improvement in the insurance industry.

Transport and storage growth was revised upwards to 3.23 per cent from 2.31 per cent, following improvements in railways, water transport and air transport.

Wholesale and retail trade growth, however, fell to 2.37 per cent from 3.71 per cent, which the committee attributed to lower manufacturing activity and imports.

Public administration and social security grew by 5.67 per cent, education by 4.17 per cent, human health and social work by 5.52 per cent, and other private services by 4.01 per cent.

In the fourth quarter, services expanded by 3.62 per cent, compared with 4.21 per cent a year earlier. Information and communication grew by 15.03 per cent, while health and social work increased by 6.14 per cent and public administration and social security by 5.46 per cent.

Wholesale and retail trade recorded growth of 0.75 per cent in the quarter, while transport and storage expanded by 3.25 per cent. Financial and insurance activities grew by 2.20 per cent.

Fourth-quarter industry contracts 4.70 per cent

The economy’s 2 per cent growth in the final quarter was markedly lower than the 6.07 per cent recorded in the corresponding period of FY2024-25.

Agriculture expanded by 3.71 per cent and services by 3.62 per cent, but industry contracted by 4.70 per cent, compared with growth of 20 per cent a year earlier.

Mining and quarrying grew by 8.90 per cent in the quarter, while large-scale manufacturing expanded by 0.41 per cent. Construction recorded growth of 3.52 per cent, supported by higher cement production, which increased by 1.9 per cent, and greater public-sector infrastructure spending.

Electricity, gas and water supply was the main drag on industrial activity, contracting by 33.19 per cent. The committee attributed the decline to lower subsidies, a high deflator and a substantial base effect, following growth of 123.03 per cent in the same quarter a year earlier.

The figures underline the contrast between the economy’s positive annual growth and the sharper slowdown towards the end of the fiscal year, when the contraction in electricity, gas and water supply outweighed expansion in other industrial activities.

The NAC appreciated the work of the PBS national accounts team and other stakeholders, including the Ministry of Planning, Development and Special Initiatives, the Ministry of Finance and the State Bank of Pakistan, in compiling the annual and quarterly estimates.