3.7% growth was pulled by service sector, followed by 3.5% growth in industry, 2.9% in agriculture sector
ISLAMABAD:
Pakistan’s economy grew by 3.7% in the last financial year, missing the annual target and dashing hopes for higher growth due to slowing wheels in the industrial and construction sectors, which has contributed to higher unemployment in the country.
The 3.7% growth was driven by the services sector, followed by 3.5% growth in industry and 2.9% in the agriculture sector.
The nation’s income per person jumped to $1,901 due to increase in foreign remittances, higher economic growth and largely stable exchange rate. The size of its economy reached $452.1 billion in the fiscal year 2025–26, becoming the 42nd largest economy in the world.
The National Accounts Committee – the body mandated to approve the economic growth rates, approved the preliminary economic growth based on data from the first three quarters of the financial year. It also approved the figures per inhabitant.
The 117th meeting of the National Accounts Committee (NAC) was held on Wednesday which was chaired by Secretary Planning Awais Manzur Sumra.
According to the details released by the Ministry of Planning, the government has missed the economic growth target of 4.2% as the economy grew by 3.7%.
The preliminary growth rate is not only lower than the official target, but it is also lower than the State Bank of Pakistan’s estimates of up to 4.8% growth this fiscal year. However, it was close to the predictions of the International Monetary Fund and the Asian Development Bank.
Pakistan has implemented economic stabilization policies for the past four years, which have taken a toll on national output and contributed to increasing poverty, unemployment and income inequality.
For the next financial year 2026-27, the government has already committed to the IMF to continue with the stabilization path and gave in writing to produce Rs2.8 trillion primary budget surplus.
According to the Ministry of Planning, the total size of the economy is Rs 126.9 trillion, which in dollar terms is $452.1 billion. With $452 billion, Pakistan’s global ranking is number 42.
Based on the population projection of the 2023 census, the per capita income is Rs533,629 – higher by Rs44,511 over the last year. In dollar terms, income grew per person $150 to $1,901 in the current fiscal year, according to the Ministry of Planning.
The committee revised up the quarterly GDP growth rates for the first and second quarters and approved the growth rate for the third quarter of 4% for the ending financial year.
Agriculture
The preliminary growth rates in the agriculture sector remained at 2.9%, which is better than last year’s 1.53%, according to the ministry. In agriculture, major crops have shown a modest growth of 0.7% due to a mixed trend in the production of wheat, maize, rice, sugarcane and cotton.
The production of wheat increased to 29.6 million. tonnes compared to 28.4 million tonnes last year with a growth of 4.6%. The production of rice increased to 10 million tons compared to 9.7 million tons last year, showing a growth of 2.8%.
Sugarcane has seen a growth of 6.2% during 2025-26 with production at 89.5 million tonnes against 84.2 million tonnes last year.
However, the cotton crop has experienced a decrease of 0.5% to 7.1 million bales. Maize is also down 2.7% to 8.8 million tonnes of production compared to 9.1 million tonnes last year.
Despite high growth of 19.74% in the previous year, other crops have shown growth of 2.43% due to high growth in gram, potato, mango, banana, turmeric and chilli, according to the ministry.
Livestock increased by 3.75% compared to 3% due to a 3.5% increase in production and a decrease in green fodder. Forestry and fishing have had normal growth rates.
Industry
In 2025-26, the industry has shown a provisional growth of 3.51%, which is significantly lower than the previous year. The sector is suffering badly due to high taxation, high energy prices and borrowing costs and uncertain economic policies.
Despite an increase in the production of coal, the mining and quarrying industry has seen a modest growth of 0.4% due to a decrease in the production of natural gas, crude oil and other minerals.
Large-scale manufacturing has seen a growth of 6.11% with a mixed trend in the production of various groups, mainly due to positive contribution in food, tobacco, oil products, rubber products, electrical equipment, automobiles, transport equipment, furniture and football.
However, the decline in the production of the electricity, gas and water supply industry and the slow growth of the construction sector dragged down the overall growth of the sector, which contributes the maximum to taxes and is the second largest job-creating sector.
Electricity and gas production has decreased by 10.63% primarily due to high base power, lower energy subsidies and slower growth in production at WAPDA and companies. In contrast to the growth of 8.8% during last year, the construction industry increased by 5.7% due to the increase in construction-related spending by the private sector and public administration, according to the Ministry of Planning.
There was a 25% drop in subsidies from Rs 1.2 trillion. to Rs.893 billion.
Services
The service industry has shown a growth of 4.1% in the past financial year with positive contributions from wholesale and retail trade, transport and storage, information & communication, public administration and social security and education.
