Key Takeaways from Pakistan Economic Survey

Ministry of Finance has released Economic Survey of Pakistan for FY26 and based on that and in line with numbers reported by National Accounts Committee (NAC), Pakistan has provisionally recorded real GDP growth of 3.7% during nine months of FY26 as against 3.18% during the same period of FY25.

The GDP growth of 3.7% for FY26 is 4-year high and is also higher than last 5, 10 and 20-year average growth of 3.09%, 3.41% and 3.44%, respectively. While the initial target set by the government was 4.2%.

IMF and World Bank estimates FY26 GDP growth of Pakistan at 3.6% and 3.0%, respectively. Topline Securities maintains its GDP estimates for FY26 in range of 3.5 to 4.0%.

Services sector growth has posted provisional growth of 4.09% in FY26 as compared to 3.14% in FY25, making it the largest contributor to overall economic growth. Within services, Public Administration & Social Security and Information and Communication saw strong momentum with a growth of 8.54% and 7.52% respectively, while Financial and Insurance Activities posted a modest increase of 0.32%.

Industrial sector has posted provisional growth of 3.51% in FY26. Within this, manufacturing, construction and Mining and Quarrying drove the recovery to growth by 6.61%, 5.73%, and 0.38% respectively. Further small, large-scale manufacturing and Slaughtering see a huge growth of 8.50%, 6.11% and 6.19% respectively. These gains are partly offset by a sharp decline of 10.63% in Electricity, Gas and Water Supply.

Agri sector is expected to record a growth of 2.89% recovering from second lowest FY25 growth of 1.53% growth in 9 years, which is second lowest growth in last 9 years. Important Crops and Cotton rebounded from last year's steep contractions of 13.49% and 19.03%, respectively, to contribution of 0.65% and 0.07% to overall agricultural growth. Meanwhile, Livestock, Forestry, and Fishing are estimated to grow by 3.75%, 2.02%, and 1.66%, respectively, providing stability to the sector.

Pakistan: GDP grows at 2.09% in 3QFY24

National Accounts Committee (NAC) has released GDP estimates for 3QFY24 which have shown a growth of over 2.09% as compared to a decline of 0.42% recorded in 3QFY23. NAC has also released provisional numbers for full year FY24, suggesting growth rate of 2.38%, largely in line with market expectation of 2.5%.

Sector wise, in 3QFY24, agriculture has registered a growth of 3.94%, industry 3.84% and services 0.83%.

All the constituents of agriculture have contributed positively including important crops (up 2.89% due to wheat), other crops (up 1.14%), cotton ginning (up 61.75%) and livestock (up 4.20%).

Despite negative growth of construction industry (down 15.75%), industrial growth of +3.84% is attributable to mining & quarrying (up 0.63%), large-scale manufacturing (up 1.47%), and electricity, gas and water supply (up 37.3%).

The overall growth in services was positive 0.83% in 3QFY24 albeit having mixed trend in its constituents i.e. wholesale & retail trade (up 0.38%), transport & storage (up 0.91%), information & communication (down 5.92%), finance & insurance activities (down 7.11%), public administration & social security (down 6.38%) and education (10.38%).

NAC has revised upward the 1QFY24 and 2QFY24 GDP growth to 2.71% and 1.79% from earlier estimates of 2.50% and 1.0%, respectively.

This takes 9MFY24 average GDP growth to 2.2% which was in line with the market expectations and higher than Bloomberg survey of 1.8%.

State Bank of Pakistan (SBP) estimates that GDP growth for FY24 is in the range of 2-3% in its half year report released on May 14, 2024.

The IMF, in its country report in May 2024, projected a growth rate of 2.0% for FY24, and the World Bank, in its Apriel 2024 update, projected a GDP growth rate of 1.8% for FY24.