Pakistan’s economy demonstrated a notable recovery in the second quarter of the 2025-26 fiscal year, achieving a growth rate of 3.89 percent. This expansion was highlighted during the 116th meeting of the National Accounts Committee held at the Pakistan Bureau of Statistics headquarters in Islamabad. The committee’s latest findings indicate that the primary engine behind this upward trajectory is a robust resurgence in the industrial sector, which managed to offset a more sluggish performance in the country’s agricultural heartland.
The industrial sector emerged as the standout performer of the quarter, posting an impressive expansion of 7.40 percent. This growth was anchored by significant gains in large-scale manufacturing, the construction industry, and the utilities sector. Within manufacturing specifically, the automobile industry, transport equipment production, and petroleum products saw substantial increases, driving the sectoral numbers upward. Furthermore, construction activity witnessed a revival, bolstered by higher cement output, though the mining and quarrying sub-sectors remained in a state of contraction due to lower production levels of essential minerals like gas and marble.
While industry surged, the services sector maintained a steady and supportive role in the national economy, growing by 3.69 percent. This stability was reinforced by positive movements in wholesale and retail trade, transportation, and the finance and insurance sectors. Public administration and social services also contributed to the overall consistency of the services wing. However, the agricultural sector faced a more challenging period, recording a modest increase of just 1.76 percent. This slowdown was largely the result of a decline in important crop yields, particularly cotton, which suffered from escalating input costs for fertilizers and seeds. On a positive note, the livestock sub-sector remained a resilient bright spot within agriculture, maintaining a trajectory of steady growth.
The National Accounts Committee also utilized this session to refine previous economic data, leading to a slight downward revision of the first-quarter growth figures for FY2025-26. Originally estimated at 3.71 percent, the Q1 growth rate was adjusted to 3.63 percent following a more detailed analysis of weaker-than-expected returns in the agricultural and industrial segments. Similarly, annual growth estimates for the preceding two years underwent minor adjustments; the growth for FY2023-24 was revised to 2.62 percent, while the figure for FY2024-25 was moved to 3.06 percent, reflecting slight recalibrations in the industrial and services data sets.
These revisions and quarterly approvals are the result of a collaborative data validation process involving several key national institutions. The committee specifically acknowledged the coordinated efforts of the Ministry of Planning, Development and Special Initiatives, the Ministry of Finance, and the State Bank of Pakistan. Their collective input ensures that the national accounts provide a transparent and accurate reflection of the country’s shifting economic landscape, allowing for more informed policy decisions as the fiscal year progresses.
As the second half of the fiscal year begins, the focus remains on sustaining the momentum observed in the industrial sector while addressing the cost pressures hindering agricultural productivity. The 3.89 percent growth in the second quarter suggests that the economy is finding its footing through manufacturing and construction, even as external global pressures and internal structural challenges continue to influence the broader macroeconomic environment. The NAC’s latest report serves as a critical benchmark for evaluating the effectiveness of ongoing economic reforms and the resilience of Pakistan’s core productive sectors.
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