Pakistan’s Q2 growth rises to 3.9% in latest GDP revision

Pakistan’s economy grew by 3.89% in the second quarter (October–December) of the current fiscal year, according to official figures approved by the National Accounts Committee (NAC). The growth rate reflects continued momentum in national output across most major sectors despite lingering challenges.

Sector performance

The industrial sector was the strongest contributor to growth, expanding by around 7.4%, driven by large‑scale manufacturing, construction, and utilities. This marked a noticeable improvement compared with modest growth in the previous year and helped anchor the overall increase.

The services sector also delivered solid gains, expanding close to 3.7%, with trade, transport, finance, public administration, education, and health services adding to the output growth. In contrast, agriculture remained subdued, with growth at roughly 1.76%, weighed down by contractions in key crop production. Livestock growth helped offset some weakness in farm output.

Data issues and revisions

At the NAC meeting, the central bank raised questions about missing crop output data, especially wheat, since harvesting was incomplete in many areas. Officials said this limited the accuracy of agricultural figures, though increased cultivation suggested a likely rise in output.

The committee also revised the first‑quarter growth for FY2025‑26 downward to about 3.63% from earlier estimates, reducing the average pace of expansion in the first half of the year.

Context and outlook

The government had set an annual growth target of roughly 4.2% for FY2025‑26, and officials said the Q2 performance keeps that goal within reach, albeit with risks. Islamabad has told the International Monetary Fund (IMF) it expects growth between 4% and 4.5% for the full year, citing solid outputs in manufacturing, construction, and services.

However, analysts warn that high fuel prices, weak external demand, and structural constraints could limit acceleration in the near term. Agriculture’s underperformance and global economic uncertainty remain key vulnerabilities in an otherwise modestly improving picture.

Why this matters

This growth figure matters because it provides a snapshot of Pakistan’s economic trajectory amidst global volatility and domestic pressures. A near‑4% expansion is stronger than recent years but still below what many economists consider necessary to meaningfully reduce poverty or generate employment at scale. The divergence between dynamic industry and lagging agriculture highlights structural imbalances policymakers must address.