Pakistan’s Economy Grows by 3.89% in Q2 FY26

Pakistan’s economy recorded 3.89 percent growth in the second quarter of FY2025-26, supported mainly by stronger industrial and services sector performance, according to the latest GDP estimates released after the National Accounts Committee (NAC) review.

The committee slightly revised first-quarter growth downward to 3.63 percent from the earlier estimate of 3.71 percent, bringing average GDP growth for the first half (1HFY26) to 3.76 percent, broadly in line with the country’s annual economic growth expectations.

Agriculture Growth Remains Moderate

The agriculture sector expanded by 1.76 percent in Q2FY26, compared to 1.72 percent in the same period last year.

Growth within agriculture was supported by:

• Livestock: 5.59% growth
• Forestry: 3.76% growth
• Fishing: 0.77% growth

However, crop production declined by 1.87 percent, limiting overall sector performance. Agriculture growth for the first half averaged 2.2 percent, below the government’s annual agriculture target of 3 percent.

Industrial Sector Leads Economic Expansion

Industry emerged as the strongest contributor to economic activity, recording 7.4 percent growth in Q2FY26, a sharp improvement from 0.8 percent growth a year earlier.

Key drivers included:

• Automobile production: 53% increase
• Transport equipment: 41% growth
• Petroleum products: 25% rise
• Electricity, gas & water supply: 15% growth
• Construction sector expansion

However, mining and quarrying contracted by 2.46 percent, reflecting declines in gas and marble production.

Overall industrial growth for the first half averaged 8.1 percent, showing a strong rebound compared to last year’s weak base.

Services Sector Shows Steady Recovery

The services sector grew 3.69 percent in Q2FY26, mainly driven by:

• Public administration: 8.69% growth
• Education & social services: 5.66% growth

Average services growth during the first half stood at 3.1 percent, slightly higher than last year’s 2.6 percent.

Growth Outlook Maintained

Despite mixed sectoral trends, policymakers have maintained Pakistan’s FY2025-26 GDP growth outlook at 3.5–4.0 percent.