The 3.7% growth rate was driven by the services sector, followed by 3.5% growth in industry and 2.9% in the agricultural sector.
ISLAMABAD:
Pakistan’s economy grew 3.7% in the outgoing fiscal year, missing the annual target and dashing hopes for further growth due to a slowdown in the manufacturing and construction sectors, which has contributed to higher unemployment in the country.
The 3.7% growth rate was driven by the services sector, followed by 3.5% growth in industry and 2.9% in the agricultural sector.
The country’s per capita income jumped to $1,901 due to increased foreign remittances, higher economic growth and a largely stable exchange rate. The size of its economy reached $452.1 billion in fiscal year 2025-26, making it the 42nd largest economy in the world.
The National Accounts Committee, the body in charge of approving economic growth rates, approved the provisional economic growth based on data from the first three quarters of the fiscal year. He also approved the per capita figures.
This Wednesday the 117th meeting of the Committee of National Accounts (CNA) was held, which was chaired by the Secretary of Planning, Awais Manzur Sumra.
According to details released by the Ministry of Planning, the government missed the economic growth target of 4.2% as the economy grew by 3.7%.
The provisional growth rate is not only lower than the official target but also lower than the State Bank of Pakistan’s estimates of up to 4.8% growth in this fiscal year. However, it was close to the predictions of the International Monetary Fund and the Asian Development Bank.
Pakistan has been implementing economic stabilization policies for the past four years, which have taken a heavy toll on national output and contributed to rising poverty, unemployment and income inequality.
For the next fiscal year 2026-27, the government has already committed to the IMF to continue on the stabilization path and has made a written commitment to produce a primary budget surplus of Rs 2.8 trillion.
According to the Ministry of Planning, the total size of the economy amounts to 126.9 trillion rupees, which in dollar terms is equivalent to 452.1 billion dollars. At $452 billion, Pakistan’s world ranking is 42nd.
According to the 2023 census population projection, the per capita income is Rs 533,629, up Rs 44,511 from last year. In dollar terms, income per person rose $150 to $1,901 in the outgoing fiscal year, according to the Planning Ministry.
The committee revised upward the quarterly GDP growth rates for the first and second quarters and approved the third quarter growth rate of 4% for the outgoing fiscal year.
Agriculture
Provisional growth rates in the agricultural sector remained at 2.9%, 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, corn, rice, sugarcane and cotton.
Wheat production increased to 29.6 million tonnes compared to 28.4 million tonnes last year, recording a growth of 4.6%. Rice production jumped to 10 million tons compared to 9.7 million tons last year, showing a growth of 2.8%.
Sugarcane recorded a growth of 6.2% during 2025-26 with production of 89.5 million tonnes against 84.2 million tonnes last year.
However, the cotton crop has seen a contraction of 0.5%, to 7.1 million bales. Corn production has also decreased by 2.7%, to 8.8 million tonnes, compared to 9.1 million tonnes last year.
Despite high growth of 19.74% in the previous year, other crops have shown a growth of 2.43% due to high growth of chickpeas, potatoes, mangoes, bananas, turmeric and chillies, according to the ministry.
Livestock increased by 3.75% compared to 3% due to the increase in production of 3.5% and the decrease in green fodder. Forestry and fisheries have recorded normal growth rates.
Industry
The industry in 2025-26 has shown a provisional growth of 3.51%, significantly lower than the previous year. The sector is suffering badly due to high taxes, high energy prices and borrowing costs and uncertain economic policies.
Despite the increase in coal production, the mining and quarrying industry recorded a modest growth of 0.4% due to a decline in the production of natural gas, crude oil and other minerals.
The large-scale manufacturing industry has seen a growth of 6.11% with a mixed trend in production of various groups mainly due to the positive contribution in food, tobacco, petroleum products, rubber products, electrical equipment, automobiles, transportation equipment, furniture and football.
However, declining production in the electricity, gas and water supply industry and slow growth in the construction sector curbed the overall growth of the sector, which contributes the most to taxes and is the second largest employment creating sector.
Electricity and gas production has contracted by 10.63% mainly due to high base effect, lower energy subsidies and slower production growth of WAPDA and its companies. Compared to growth of 8.8% over the past year, the construction industry increased by 5.7% due to increased construction-related expenditures by the private sector and general government, according to the Ministry of Planning.
There was a 25% decrease in subsidies, from Rp 1.2 trillion to Rp 893 billion.
Services
The services industry has shown growth of 4.1% during the outgoing fiscal year, with positive contributions from wholesale and retail trade, transportation and storage, information and communications, public administration and social security and education.
