ISLAMABAD: Pakistan’s economy grew by 3.71 per cent in the first quarter (July–September) of the current fiscal year 2025-26, marking a significant improvement from the 1.56pc growth recorded in the same period last year, according to data released by the National Accounts Committee (NAC) on Tuesday.
However, the quarterly performance showed a slowdown compared to the 6.17pc expansion recorded in the preceding quarter (April–June). Officials attributed the deceleration to weak consumer demand and the adverse impact of monsoon floods, which weighed on overall economic activity during the quarter.
The year-on-year growth in the first quarter was largely driven by strong performance in the industrial sector, which expanded by 9.38pc. Agriculture posted growth of 2.89pc, while the services sector grew by 2.35pc. The combined performance of these three major sectors contributed to the overall economic expansion.
The NAC also slightly revised quarterly GDP growth rates for the previous fiscal year, estimating growth at 1.56pc in Q1, 2.03pc in Q2, 2.66pc in Q3, and 6.17pc in Q4 of FY25. The revisions were approved during the 115th meeting of the NAC, chaired by the Secretary of the Planning Commission, held at the Pakistan Bureau of Statistics headquarters.
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In the agriculture sector, while overall growth stood at 2.89pc, important crops registered a decline of 0.75pc, mainly due to a 1.2pc drop in cotton production. Other crops recorded a sharp contraction of 6.37pc, compared to a strong growth of 19.33pc in the same quarter last year. Officials cited a 14.4pc decline in green fodder production and a 13pc increase in input costs, particularly fertilisers, as key factors. In contrast, the livestock sector showed robust growth of 6.29pc, while forestry and fishing grew by 2.13pc and 0.91pc, respectively.
Growth slows from 6.1pc in preceding quarter due to floods.https://t.co/Fkwzu1bywZ
— Dawn Business (@dawn_business) December 31, 2025
The industrial sector’s strong growth was supported by a rebound in large-scale manufacturing, which expanded by 3.93pc. Notable increases were seen in automobiles, food products, transport equipment, non-metallic mineral products, and rubber goods. However, mining and quarrying contracted by 4.13pc due to lower output of natural gas, crude oil, and other minerals.
The services sector recorded modest growth of 2.35pc, reflecting mixed trends across sub-sectors.
Looking ahead, the State Bank of Pakistan has projected GDP growth of 4pc for FY26. The World Bank has forecast a lower growth rate of around 3pc, while the government has set an ambitious target of 4.2pc for the fiscal year.
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