Pakistan Economy Shows Recovery Signs as FY26 GDP Growth Estimated at 3.7 pc

Pakistan posts moderate economic rebound as GDP crosses $452bn mark

Pakistan’s economy has shown signs of stabilisation during the ongoing fiscal year, as official estimates placed national economic growth at 3.7 per cent, reflecting a gradual rebound in productive activity after years of economic pressure.

Fresh data approved by the National Accounts Committee (NAC) on Wednesday showed that the country’s gross domestic product increased to $452.1 billion in FY2025-26, compared to nearly $411 billion in the previous fiscal year.

The latest figures indicate that economic activity has improved across several major sectors, particularly services, manufacturing and construction, although the overall expansion remained slightly below the government’s earlier growth expectations.

Officials attending the NAC meeting at the Pakistan Bureau of Statistics said the services sector remained the backbone of the economy during the year, supported by stronger performance in trade, communication, transport, education and public services.

According to the committee’s estimates, the services sector expanded by 4.09 pc, while industrial output rose by 3.51 pc. Agriculture, which continues to face weather-related and productivity challenges, recorded a comparatively slower growth rate of 2.89 pc.

Large-scale manufacturing emerged as one of the strongest contributors to industrial recovery, posting growth of more than 6pc during the fiscal year. Officials linked the improvement to higher activity in automobiles, petroleum products, food processing, transport equipment and electrical machinery.

The construction sector also maintained momentum amid increased development activity and relatively improved private investment trends. Economists believe the sector’s recovery has supported employment opportunities and allied industries during the year.

Meanwhile, Pakistan’s per capita income rose to $1,901 from $1,824 a year earlier. However, financial experts noted that despite the increase in dollar terms, inflation and rising utility costs continue to put pressure on household budgets.

Agricultural performance remained uneven as higher wheat, sugarcane and rice production offset declines in maize and cotton output. Livestock continued to provide support to the rural economy with steady annual growth.

The NAC also revised upward the country’s quarterly growth estimates, suggesting stronger-than-expected economic activity during the first half of the fiscal year.

Economic observers say the latest figures reflect improving macroeconomic confidence following financial stabilisation measures and easing inflationary trends. However, they warn that long-term economic sustainability will depend on export growth, industrial competitiveness, tax reforms and investment inflows.