Pakistan’s economy expands 3.89% in Q2, industry leads recovery

Pakistan’s GDP grew 3.89% year-on-year in the second quarter of FY26, the fastest Q2 expansion in four years, driven by strong industrial activity, the National Accounts Committee (NAC) reported on Thursday.

Industry surged 7.4% in Q2, up from 0.8% a year earlier. Large-scale manufacturing rose 5.71%, led by automobiles, transport equipment, and petroleum products. Electricity, gas, and water supply jumped 15%, while construction expanded around 11%. Mining and quarrying, however, fell 2.46% due to weaker gas and marble output.

Agriculture grew 1.76%, supported by livestock, forestry, and fishing, despite declines in major crops, including cotton. The services sector increased 3.69%, led by public administration, social services, and healthcare.

Q1 growth was revised slightly down to 3.63% from 3.71%, bringing first-half FY26 average to 3.76%. NAC also revised past GDP figures: FY24 to 2.62% and FY25 to 3.06%.

Analysts say the data points to a gradual recovery, with full-year GDP projected between 3.5% and 4%, though agricultural weaknesses and external pressures remain key risks.