Rise in industry output pushes Pakistan growth rate to 3.89% in 2QFY26

Pakistan's economy expanded 3.89% in the second quarter of fiscal year 2025-26, driven primarily by a sharp rebound in industry, the Pakistan Bureau of Statistics said Thursday.

The National Accounts Committee approved the provisional growth figure at its 116th meeting in Islamabad, chaired by the secretary of the Ministry of Planning, Development and Special Initiatives.

Industry led the sectoral growth with a 7.40% expansion — a dramatic recovery from 0.78% in the same quarter last year. Agriculture grew 1.76%, while services posted growth of 3.69%, up from 2.80% in Q2 of the previous fiscal year.

Industry

Large-scale manufacturing grew 5.71%, buoyed by strong output in automobiles (52.95%), transport equipment (40.81%), and petroleum products (24.65%). The electricity, gas, and water supply industry posted the quarter's standout figure, growing 15.11%, attributed to increased subsidies and a decline in the consumer price index for electricity. Construction expanded 10.53%, supported by an 8.44% increase in cement production.

The mining and quarrying segment contracted 2.46%, pulled down by declines in gas output (-3.98%), marble (-10.68%), and limestone (-8.35%).

Agriculture

Livestock growth edged up to 5.59% from 5.56% in the same period last year. Forestry and fishing grew 3.76% and 0.77%, respectively.

Major crops weighed on the sector, however. Important crops contracted 1.87%, driven by a 0.9% decline in cotton production and higher input costs, including a 6.0% rise in seed prices and a 7.2% increase in fertilizer costs. Other crops contracted 5.69%, though that was a marked improvement from a 19.14% contraction in Q2 of the previous year.

Services

Wholesale and retail trade grew 4.46%, supported by increases in marketable supply from domestic agricultural production (2.0%), manufacturing (6.1%), and imports (1.3%). Transportation and storage expanded 2.79%, on higher output in road and water transport. Finance and insurance grew 4.52%, despite a high base of 11.13% in Q2 of FY2025.

Public administration and social security (8.69%), education (4.90%), human health and social work activities (5.66%), and other private services (2.79%) also contributed positively to services growth.

Revised figures

The committee also revised down growth for the first quarter of FY2025-26 to 3.63%, from a previously approved estimate of 3.71%. Industry growth in Q1 was revised to 8.86% from 9.38%, reflecting a steeper contraction in mining and quarrying (from -4.13% to -5.48%) and downward adjustments in large-scale manufacturing (from 4.10% to 3.93%) and construction (from 21.03% to 19.22%). Agriculture growth in Q1 was also revised down to 2.72% from 2.89%, partly due to higher contraction in important crops and other crops. Services, however, were revised upward to 2.44% from 2.35%, driven by improvements in public administration, education, and health sectors.

Annual GDP growth for FY2024-25 was revised marginally to 3.06% from an earlier estimate of 3.09%. Agriculture was nudged up to 1.53% from 1.51%, while industry and services were revised down slightly to 5.23% and 3.03%, from 5.26% and 3.09%, respectively.

Annual growth for FY2023-24 was revised to 2.62% from 2.63%, with a small downward adjustment in industry from -0.89% to -0.99%.