Pakistan’s FY26 GDP growth revised to 3.65%, economy valued at USD 450.4bn

Pakistan’s economic growth for fiscal year 2025-26 has been revised slightly downward to 3.65 per cent from an earlier estimate of 3.70 per cent, while the size of the economy reached USD 450.4 billion, according to updated national accounts approved by the National Accounts Committee on Monday.

The committee also approved revised quarterly growth estimates for the first three quarters of FY26 and a fresh estimate for the fourth quarter, when the economy expanded by 2.0 per cent, markedly slower than the growth recorded earlier in the year.

According to the Pakistan Bureau of Statistics (PBS), the economy was valued at Rs126.4 trillion, equivalent to USD 450.4 billion, in FY26, compared with Rs114.9 trillion, or USD 408.7 billion, a year earlier. Per capita income stood at Rs531,897, or USD 1,896.

The 118th meeting of the National Accounts Committee was held at the National Command and Control Centre at the PBS headquarters in Islamabad and was chaired by the secretary of the Ministry of Planning, Development and Special Initiatives.

The committee approved the incorporation of revised import data into national accounts estimates covering FY21 to FY25, revised GDP growth rates for the first three quarters of FY26, the fourth-quarter estimate, and updated annual growth rates for FY25 and FY26.

Agriculture improves, services and industry revised lower

The revised FY26 estimate reflected stronger agriculture than previously calculated, while growth in both industry and services was lowered.

Agriculture grew by 3.50 per cent, compared with the earlier estimate of 2.89 per cent. Industrial growth was revised to 3.34 per cent from 3.51 per cent, while services growth was lowered to 3.81 per cent from 4.09 per cent.

The improvement in agriculture was driven in part by higher estimates for important crops, whose growth was revised to 1.59 per cent from 0.65 per cent. Growth in other crops also improved substantially to 4.28 per cent from 2.43 per cent, supported by higher production of pulses, fruit, tomatoes, oilseeds and green fodder.

PBS said production of pulses increased by 6.3 per cent, fruit by 1.3 per cent, tomatoes by 44 per cent, oilseeds by 5.4 per cent and green fodder by 2.4 per cent.

Livestock growth, however, was adjusted slightly downward to 3.71 per cent from 3.75 per cent due to higher fodder inputs. Forestry and fishing grew by 10.80 per cent and 1.39 per cent, respectively.

The updated figures showed that agriculture, forestry and fishing as a whole expanded by 3.50 per cent in FY26, compared with 1.32 per cent a year earlier. Crops grew by 2.76 per cent, while cotton ginning posted only marginal growth of 0.04 per cent.

Manufacturing grows, but industrial estimate lowered

Industry grew by 3.34 per cent during FY26, below the previous estimate of 3.51 per cent.

Mining and quarrying, however, performed better than previously estimated, with growth revised upward to 1.52 per cent from 0.38 per cent.

The improvement was attributed to increased 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 was revised downward to 5.01 per cent from 6.11 per cent.

Several major manufacturing categories nevertheless posted strong growth. Automobiles expanded by 57.77 per cent, transport equipment by 42.36 per cent, electrical equipment by 14.25 per cent, rubber products by 14.19 per cent and tobacco by 12.61 per cent.

Petroleum products grew by 9.7 per cent, food by 7.03 per cent and furniture by 22.69 per cent.

Other manufacturing, including football production, grew by 16.62 per cent.

At the same time, a number of large-scale industries remained in contraction. Pharmaceuticals 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 during the July-June period.

Electricity, gas and water supply contracted by 10.24 per cent, although this represented a slight improvement from the earlier estimate of a 10.63 per cent decline. Construction growth was revised upward to 6.30 per cent from 5.73 per cent, which PBS attributed to higher public-sector construction expenditure.

Services growth revised down to 3.81%

Services, the largest part of the economy, expanded by 3.81 per cent in FY26, lower than the earlier estimate of 4.09 per cent.

Wholesale and retail trade growth was revised down sharply to 2.37 per cent from 3.71 per cent, reflecting lower manufacturing activity and imports.

Transport and storage, on the other hand, improved to 3.23 per cent from 2.31 per cent, supported by upward revisions in railways, water transport and air transport.

Information and communication emerged as one of the stronger services sectors, with growth revised upward to 9.53 per cent from 7.52 per cent. Finance and insurance also recorded a notable improvement, rising to 4.23 per cent from just 0.32 per cent, mainly because of stronger insurance activity.

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.

Although some of these estimates were revised lower, PBS said all major services components remained on a positive growth trajectory.

Fourth-quarter growth slows to 2%

The economy expanded by 2.0 per cent in the fourth quarter of FY26, significantly below the pace recorded in the preceding quarters. PBS attributed the slower fourth-quarter number partly to a high base, as the economy had grown by 6.07 per cent during the corresponding quarter of FY25.

Agriculture grew by 3.71 per cent during the quarter, compared with 0.58 per cent in the same period a year earlier. Important crops expanded by 2.21 per cent, while other crops grew by 2.62 per cent.

Pulses production rose by 39.6 per cent, fruit by 4.1 per cent, tomatoes by 14 per cent and green fodder by 0.3 per cent during the quarter.

Livestock grew by 3.92 per cent, forestry by 14.96 per cent and fishing by 1.33 per cent.

Industry, however, contracted by 4.70 per cent, compared with growth of 20 per cent in the corresponding quarter of the previous year. Most industrial sub-sectors remained positive: mining and quarrying grew by 8.90 per cent, large-scale manufacturing by 0.41 per cent and construction by 3.52 per cent.

The major drag came from electricity, gas and water supply, which contracted by 33.19 per cent. PBS attributed the decline to lower subsidies, a high deflator and an exceptionally strong base effect of 123.03 per cent.

Construction growth was supported by a 1.9 per cent increase in cement production and higher public-sector infrastructure spending.

Services grew by 3.62 per cent in the fourth quarter.

Information and communication recorded particularly strong growth of 15.03 per cent, while health and social work grew by 6.14 per cent, public administration and social security by 5.46 per cent and other private services by 4 per cent. Wholesale and retail trade grew by 0.75 per cent, transport and storage by 3.25 per cent, finance and insurance by 2.20 per cent and education by 3.97 per cent.

Earlier quarters also revised

The committee also revised growth estimates for each of the first three quarters of FY26.

First-quarter growth was trimmed slightly to 3.89 per cent from 3.92 per cent. Second-quarter growth was raised to 4.31 per cent from 4.05 per cent, while the third-quarter estimate was increased more significantly to 4.42 per cent from 3.99 per cent.

Agriculture estimates were raised across all three quarters, while industry saw relatively minor revisions.

Services growth in the first quarter was reduced to 3.04 per cent from 3.16 per cent, but was raised in the second quarter to 4.0 per cent and in the third quarter to 4.54 per cent.

The committee separately revised FY25 GDP growth down to 3.11 per cent from 3.18 per cent.

Agriculture growth for FY25 was lowered to 1.32 per cent, industry to 5.46 per cent and services to 3.13 per cent, reflecting revisions across forestry, mining, utilities, wholesale and retail trade and transportation.

The National Accounts Committee said the updated estimates were prepared with input from the PBS national accounts team and key stakeholders, including the Ministry of Planning, Development and Special Initiatives, Ministry of Finance and State Bank of Pakistan.