The National Accounts Committee (NAC) on Thursday revised the country’s GDP growth for the first quarter (Q1) of fiscal year 2025-26 downward to 3.63 percent from the previously estimated 3.71 percent, while approving a stronger expansion of 3.89 percent in the second quarter (Q2).
The meeting, chaired by Secretary Ministry of Planning, Development and Special Initiatives Awais Manzur Sumra, reviewed and approved provisional quarterly estimates along with updated annual growth figures.
The downward revision in Q1 growth was attributed to reduced performance in agriculture and industry, despite a slight improvement in the services sector.
Agriculture growth was revised to 2.72 percent from 2.89 percent, mainly due to higher contraction in important and other crops amid increased input costs, including seeds and fertilizers.
Industry growth was adjusted to 8.86 percent from 9.38 percent owing to deeper contraction in mining and quarrying and lower-than-expected expansion in large-scale manufacturing and construction.
In contrast, services sector growth improved marginally to 2.44 percent from 2.35 percent, supported by better performance in public administration and social security, education, and health-related activities.
For the second quarter, the economy recorded a growth of 3.89 percent, driven primarily by industrial expansion of 7.40 percent, alongside contributions from services at 3.69 percent and agriculture at 1.76 percent. The agriculture sector remained under pressure due to contraction in important crops, reflecting lower cotton output and higher input usage, although livestock, forestry, and fishing posted moderate growth.
The industrial sector showed a significant recovery compared to last year, supported by growth in large-scale manufacturing, energy supply, and construction.
Large-scale manufacturing expanded on the back of strong output in automobiles, transport equipment, and petroleum products, while construction activity was aided by increased cement production. However, mining and quarrying continued to contract due to lower output of key minerals.
The services sector also maintained steady growth in Q2, led by wholesale and retail trade, finance and insurance, and public sector services.
Increased domestic production and imports contributed to trade activity, while transport and storage sectors benefitted from higher output in road and water transport. Finance and insurance sector sustained growth despite a high base effect, and social sectors such as education and health also posted positive gains.
The committee also approved updated annual GDP growth rates, revising FY2023-24 growth slightly downward to 2.62 percent from 2.63 percent, primarily due to a marginal decline in industrial performance. Similarly, FY2024-25 growth was adjusted to 3.06 percent from 3.09 percent, reflecting downward revisions in industry and services, despite a slight improvement in agriculture.
Overall, the committee acknowledged the contributions of relevant ministries and institutions in compiling the national accounts and finalizing the quarterly GDP estimates.