KARACHI – Pakistan’s economic growth lost momentum in final quarter of fiscal year 2025–26, with gross domestic product (GDP) expanding by 2 percent as the industrial sector contracted sharply.
The latest figures by National Accounts Committee (NAC) shows contrast between stronger-than-expected growth in the middle quarters and a substantial slowdown toward the end of the fiscal year. NAC lowered full-year GDP growth estimate to 3.65 percent from 3.70 percent, while the fourth-quarter performance fell far short of the 6.07 percent growth recorded in the corresponding period of FY25.
The revisions were approved at committee’s 118th meeting after adjustments to import data and other annual and quarterly economic indicators, the Pakistan Bureau of Statistics (PBS) said in a press release.
Pakistan’s economy was valued at Rs. 126.4 trillion, equivalent to $450.4 billion, during FY26. Per capita income stood at Rs. 531,897, or $1,896. The NAC also revised the previous fiscal year’s growth rate downward to 3.11 percent from the earlier estimate of 3.18 percent.
The revised quarterly figures show that economic growth remained relatively strong through the first nine months of FY26 before slowing sharply in the final quarter. First-quarter growth was marginally reduced to 3.89 percent from 3.92 percent. In contrast, the second-quarter estimate was raised to 4.31 percent from 4.05 percent, while third-quarter growth was revised upward to 4.42 percent from 3.99 percent.
The fourth quarter, however, delivered a markedly weaker result, with GDP growth dropping to 2 percent against 6.07 percent a year earlier.
Industrial sector emerged as the weakest performer in the fourth quarter, contracting by 4.70 percent after recording an extraordinary 20 percent expansion in the same period of FY25. The steepest decline came from electricity, gas and water supply, which plunged by 33.19 percent. The PBS linked the contraction to lower subsidies, a high deflator and the base effect from the previous year.
The industrial sector’s full-year growth estimate was also reduced to 3.34 percent from 3.51 percent, reflecting weaker-than-expected large-scale manufacturing and adjustments in utilities-related activity.
Large-scale manufacturing shows significant downward adjustment, with its FY26 growth estimate cut to 5.01 percent from 6.11 percent, based on the Quantum Index of Manufacturing.
The revision came despite strong growth in several industries, particularly automobile production, which surged by 57.77 percent. Transport equipment output increased by 42.36 percent, while electrical equipment production rose by 14.25 percent and rubber products expanded by 14.19 percent.
Furniture manufacturing posted growth of 22.69 percent, tobacco production increased by 12.61 percent, petroleum products rose by 9.7 percent, and food manufacturing expanded by 7.03 percent.
Mining and quarrying performed better than previously estimated, with its growth rate revised upward to 1.52 percent from 0.38 percent.
Agriculture provided a more encouraging picture, with its annual FY26 growth estimate revised upward to 3.50 percent from 2.89 percent. The growth estimate for important crops increased to 1.59 percent from 0.65 percent, supported by wheat and maize. Other crops also performed better than initially expected, with their growth rate revised upward to 4.28 percent from 2.43 percent.
Construction was another area where the revised estimates improved. Its FY26 growth rate was raised to 6.30 percent from 5.73 percent, reflecting increased public-sector construction expenditure.
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