ISLAMABAD: Leading economists have challenged the government’s provisional GDP growth estimate of 3.70 percent for the outgoing fiscal year 2025-26, arguing that the figure is overstated and likely to be revised downward once the entire year’s data is available.
Former finance minister Dr Hafeez Pasha told Business Recorder that the government’s provisional growth estimate ‘is exaggerated’ and that the economy’s actual expansion is below 3 percent.
He acknowledged some positive developments in the economy, particularly the recovery in Large Scale Manufacturing (LSM), which has been supported mainly by robust growth in the automobile sector. However, he noted that the textile sector — one of Pakistan’s largest export earners — has remained almost stagnant.
Dr. Pasha further expressed concern at the performance of the agriculture sector, particularly cotton production, which has once again failed to show significant improvement.
“The textile sector is stagnant while agriculture, especially cotton, remains weak. Overall GDP growth is below 3 percent,” he added.
Dr Ashfaque Hassan Khan, former Advisor Finance Ministry said the provisional GDP estimate is based largely on data covering only seven to eight months of the current fiscal year, while the remaining months have been projected through estimates.
“The 3.7 percent growth figure is based on partial information and is subject to revision. The remaining four months are based on estimates and the final outcome could change going forward,” he said.
Khan added that emerging global uncertainties, including the Middle East conflict and developments in international markets, could further affect economic performance.
He pointed out that Pakistan’s average GDP growth over the last four to five years has remained around 2.7 percent, and suggested that the current year’s growth trajectory does not indicate any significant structural improvement in the economy.
Khan also added that the reported GDP growth figure represents real economic growth and does not include the impact of inflation.
The National Accounts Committee (NAC) last month approved third-quarter and annual national accounts estimates for fiscal year 2025-26 and updated GDP growth rates for the first and second quarters of 2025-26 to 3.92 percent and 4.05 percent, respectively, against 3.63 percent and 3.89 percent reported during the NAC’s 116th meeting.
The committee reported that the economy recorded provisional growth of 3.99 percent during the third quarter of 2025-26. Based on provisional estimates, the committee assessed overall GDP growth for 2025-26 at 3.70 percent, although economists cautioned that the figure remains subject to revision once complete-year data is compiled.
Copyright Business Recorder, 2026