Pakistan economy expanded by 3.71 per cent in the first quarter (July–September) of FY26, marking a notable improvement from the 1.56pc growth recorded in the same period last year, according to data released by the National Accounts Committee (NAC).
Despite the year-on-year improvement, the pace of growth slowed compared with the previous quarter’s strong 6.17pc expansion. Officials attributed the moderation to weak consumer demand and the adverse impact of monsoon floods, which disrupted economic activity across several sectors.
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The quarterly growth was largely driven by a sharp rebound in industry, which expanded by 9.38pc. Agriculture posted growth of 2.89pc, while the services sector grew by 2.35pc, together supporting the overall economic performance during the quarter.
The NAC also revised quarterly GDP growth figures for FY25, placing growth at 1.56pc in Q1, 2.03pc in Q2, 2.66pc in Q3, and 6.17pc in Q4. These revisions reflect a stronger end to the previous fiscal year than earlier estimates suggested.
In agriculture, growth was uneven. Important crops declined by 0.75pc due mainly to a fall in cotton production, while other crops dropped sharply as higher fertiliser costs and reduced green fodder output weighed on farm activity. In contrast, livestock recorded robust growth of 6.29pc, supported by lower fodder costs, while forestry and fishing showed modest gains.
Industrial growth was broad-based but mixed across sub-sectors. Large-scale manufacturing expanded by 3.93pc, led by food, automobiles, transport equipment, and construction-related industries. However, mining and quarrying contracted due to lower production of natural gas, crude oil, and other minerals.
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The services sector showed modest improvement, with gains reflecting mixed performance across trade, transport, finance, and government services. Looking ahead, the State Bank of Pakistan expects GDP growth of around 4pc in FY26, while the government has set a more ambitious target of 4.2pc, amid cautious optimism about sustained recovery.