Pakistan’s economy grew by 3.7 percent in the first quarter of fiscal year 2025–26, driven by the strongest industrial performance in eight years, according to official estimates released by the National Accounts Committee.
The growth marks the highest first-quarter expansion in four years and is above the eight-year average first-quarter growth of 3.3 percent. The committee also slightly revised last year’s GDP growth upward to 3.09 percent from an earlier estimate of 3.04 percent, according to Topline Securities.
Industry emerged as the main driver, posting a sharp 9.4 percent growth in the first quarter, compared to just 0.12 percent in the same period last year. Analysts said this was the strongest first-quarter industrial growth in eight years.
According to Topline Research, the surge was led by a 25.5 percent increase in electricity, gas and water supply, supported by higher subsidies and favorable base effects.
The construction sector also expanded strongly by 21 percent due to higher cement production, while large-scale manufacturing grew by 3.9 percent.
Agriculture recorded growth of 2.89 percent despite a contraction in crops. Crop output declined by 3.65 percent, mainly due to lower cotton production, while livestock growth of 6.3 percent and forestry growth of 2.1 percent helped offset the decline.
The services sector grew by 2.35 percent in the quarter, supported by strong performance in finance and insurance, which expanded by 10.4 percent, and public administration and social security, which grew by 8.08 percent. However, information and communication services declined sharply by 29 percent, reflecting lower mobile phone production.
Based on the stronger-than-expected industrial performance, analysts at Topline Research have revised Pakistan’s full-year GDP growth outlook for FY26 upward to 3.5 to 4.0 percent, from an earlier estimate of 3 to 3.5 percent.
They said the upward revision is mainly due to improved prospects for industry and construction, with better cement offtake and continued base effects expected to support growth in the coming quarters.