Pakistan economy grows 3.7pc in FY26 as recovery continues despite missing target

Pakistan’s economy records modest recovery with 3.7pc growth in FY26
Islamabad (Nazrana Times) Bureau report Ali Imran Chattha 
 

Pakistan’s economy showed a gradual recovery during the fiscal year 2025-26, as the government estimated the country’s gross domestic product (GDP) growth at 3.7 per cent. Although the figure reflects improvement compared to last year, it remains below the official target of 4pc set earlier by authorities.
The latest estimates were approved during a meeting of the National Accounts Committee in Islamabad, where officials reviewed economic performance across major sectors.
According to the data, the services sector remained the strongest contributor to economic growth, expanding by 4.09pc during the fiscal year. The industrial sector recorded growth of 3.51pc, supported by improved manufacturing and construction activity, while the agriculture sector grew by 2.89pc.
Officials said the overall size of Pakistan’s economy increased significantly in dollar terms during the year. Per capita income also rose slightly, indicating an improvement in average income levels compared to the previous fiscal year.
Within agriculture, better production of crops such as potatoes, bananas, gram and mangoes helped support growth, although cotton production remained weak. In industry, recovery in automobile manufacturing, petroleum products and food processing contributed to better performance.
Economic managers described the figures as a sign of stabilisation after a difficult period marked by high inflation, currency depreciation and external financing pressures. Quarterly growth data also suggested improving momentum during different stages of the fiscal year.
Despite the positive trend, economists warned that challenges still remain. Rising living costs, unemployment concerns, weak exports and limited private investment continue to affect overall economic strength. Experts believe long-term reforms and stable policies will be necessary for Pakistan to achieve stronger and sustainable growth in the future.
The updated economic figures were released ahead of the upcoming federal budget, where the government is expected to announce new development plans, revenue measures and growth targets for the next fiscal year.