Pakistan’s economy grew 3.71% in the first quarter of FY26, according to figures shared by Planning Minister Ahsan Iqbal, marking a sharp improvement over the revised 1.80% growth recorded in the same quarter of FY25.
The year-on-year difference of 2.15 percentage points signals an early shift in the macroeconomic trajectory compared to last year’s pattern of gradually accelerating quarterly growth.
Announcing the GDP growth ahead of Pakistan Bureau of Statistics’ (PBS) Quarterly National Accounts release, Iqbal mentioned unrevised growth figures from the previous year, overstating the growth on X.
Meanwhile revised national accounts data for FY25 show quarterly GDP expansions of 1.80% in Q1, 1.94% in Q2, 2.79% in Q3, and 5.66% in Q4, resulting in a full-year growth rate of 3.04%. Pakistan’s economy was valued at $407.2 billion at the end of FY25, with per-capita income estimated at $1,812.
Ahsan Iqbal noted that the improvement in Q1 FY26 is driven largely by industrial output, which expanded 9.38%, a substantial jump from just 0.12% in Q1 FY25. The minister described this as “a qualitative change” in the composition of growth, pointing to a broader base emerging earlier in the fiscal year.
He also highlighted that the economy is posting gains despite the 2025 flood shock, the withdrawal of energy subsidies, fiscal consolidation measures, and continued food-price pressures. These constraints had weighed on the macroeconomic environment through much of FY25, with growth strengthening only in the final quarter.
The Planning Minister expects the stronger opening quarter to support a more stable recovery path, although risks remain tied to inflationary pressures, external financing needs, and the pace of industrial activity through the remaining quarters of FY26.
