The government has revised the GDP growth rate downward to 3.65 percent for FY26, down from the earlier provisional figure of 3.7 percent. The size of the economy now stands at $450.4 billion, while per capita income, in dollar terms, hovers at $1,896 in FY26.
The National Accounts Committee (NAC) met under the chairmanship of the acting secretary of planning at the Pakistan Bureau of Statistics (PBS) on Monday. It approved the incorporation of revised import data in national accounts estimates from FY2021 to FY2025, quarterly GDP growth rates for all four quarters of FY2026, and updated annual growth rates for FY2025 and FY2026.
Top sources said that economic growth in the fourth quarter (April-June 2026) witnessed a drastic correction, nosediving to 2 percent from 4.4 percent in the previous quarter. Normally, the final quarter records the highest growth as economic activity is in full swing; in the last 10 years, the final quarter growth fell below the quarterly average of the first three quarters on only two occasions.
There is an extensive debate regarding the deteriorating poverty and employment situation in the country. The final quarter growth figures have furthered concerns, as the employment-oriented commodity-producing sector registered negative growth.
Growth was driven entirely by the services sector, specifically less employment-intensive components like IT, government services, health, and education, rather than trade. The growth in government services contradicts government consumption figures, which contracted by 5.6 percent, whereas the growth number shows a 5.5 percent increase.
The PBS calculates growth from both production and demand sides. On the demand side, all components - government consumption, investment, and net exports - show negative growth, with only household consumption remaining positive.
This implies serious issues regarding the quality and consistency of growth data. Intriguingly, small-scale manufacturing registered its highest quarterly growth since 2021 in the last quarter, while large-scale manufacturing witnessed almost flat growth.
The livestock methodology was altered to reflect better growth: under the methodology approved in the rebasing document, growth is 2.7 percent, but under the new methodology of intermediary consumption, it is shown as 3.9 percent, which overestimates GDP growth by 0.2 percentage points. The mining sector also registered its highest growth in over a decade.
The NAC updated growth rates for agriculture, industry, and services are 3.50pc, 3.34pc, and 3.81pc, compared with earlier estimates of 2.89pc, 3.51pc, and 4.09pc, respectively. Analysts suggest that these revisions highlight the structural challenges facing the economy.
Without a recovery in the commodity-producing sectors, the reliance on services-led growth may not be sustainable for long-term poverty alleviation or job creation.