Pakistan’s economy grows 3.89 pct in Q2 FY26, industry leads expansion

Pakistan’s economy grew by 3.89% year-on-year in the second quarter of fiscal year 2025-26, marking the highest second-quarter growth in four years, with industry emerging as the key driver, according to data released by the National Accounts Committee (NAC).

The latest figures, compiled by the Pakistan Bureau of Statistics, show that first-quarter growth was revised down to 3.63% from an earlier estimate of 3.71%, bringing average growth in the first half of FY26 to 3.76%.

The committee also made slight downward revisions to previous years, with GDP growth for FY2023-24 adjusted to 2.62% and FY2024-25 to 3.06%.

The industrial sector recorded a robust expansion of 7.4% in Q2, significantly higher than 0.8% in the same period last year.

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Large-scale manufacturing (LSM) grew by 5.71%, supported by strong gains in automobiles, transport equipment, and petroleum products. The electricity, gas, and water supply segment rose by 15%, while construction expanded by around 11%.

However, mining and quarrying contracted by 2.46% due to declines in gas and marble production.

The agriculture sector grew by 1.76% during the quarter, supported by livestock, forestry, and fishing, despite a contraction in major crops, including a slight decline in cotton output.

The services sector expanded by 3.69%, driven by growth in public administration, social services, and healthcare-related activities.

Analysts said the latest data keeps full-year GDP growth projections intact in the range of 3.5% to 4.0%, supported by improving industrial activity and a stable services sector.

The figures suggest a gradual recovery in economic activity, although challenges in agriculture and external pressures remain key risks going forward.