Pakistan’s economy grows 3.89% in Q2 FY26

Industry emerged as the key growth driver in Q2, expanding by 7.40%, supported by gains in large-scale manufacturing, construction, and utilities.

The services sector grew by 3.69%, while agriculture posted a modest increase of 1.76%, weighed down by a decline in crop output, particularly cotton.

Despite the improved quarterly performance, the committee revised down Q1 growth for FY2025-26 to 3.63%, compared to an earlier estimate of 3.71%.

The downward revision was attributed to weaker-than-expected performance in agriculture and industry, although services showed slight improvement.

On an annual basis, GDP growth estimates were also marginally adjusted downward. Growth for FY2023-24 was revised to 2.62% from 2.63%, while FY2024-25 was adjusted to 3.06% from 3.09%, reflecting minor downward revisions in industry and services.

Within the industrial sector, large-scale manufacturing grew by 5.71% in Q2, driven by notable increases in automobile production, transport equipment, and petroleum products.

Meanwhile, construction activity also picked up, supported by higher cement output.

However, mining and quarrying remained in contraction due to reduced output of key minerals including gas and marble.

In agriculture, the sector continued to face pressure from declining crop yields, with important crops contracting amid lower cotton production and higher input costs such as seeds and fertilizers.

Livestock, however, remained a bright spot, recording steady growth.

The services sector maintained a stable trajectory, supported by gains in wholesale and retail trade, transportation, finance and insurance, as well as public administration and social services.

Overall, the NAC acknowledged the coordinated efforts of key institutions, including the Ministry of Planning, Development and Special Initiatives, the Ministry of Finance, and the State Bank of Pakistan, in compiling and validating the national accounts data.

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