Per capita income climbs to $1,901

ISLAMABAD:

Pakistan's economy grew 3.7% in the outgoing fiscal year, missing the annual target and dashing hopes of higher growth due to slowing wheels of the industry and construction sectors, which has contributed to higher unemployment in the country.

The 3.7% growth rate was pulled by the services sector, followed by 3.5% growth in the industry and 2.9% in the agriculture sector.

The nation's per person income jumped to $1,901 due to increase in foreign remittances, higher economic growth and largely stable exchange rate. The size of its economy reached $452.1 billion in the fiscal year 2025-26, becoming the 42nd largest economy in the world.

The National Accounts Committee—the body mandated to approve the economic growth rates, approved the provisional economic growth based on the data of the first three quarters of the fiscal year. It also approved the per capita figures.

The 117th meeting of the National Accounts Committee (NAC) was held on Wednesday, which was chaired by Secretary Planning Awais Manzur Sumra.

According to the details released by the Planning Ministry, the government has missed the economic growth target of 4.2%, as the economy grew by 3.7%.

The provisional growth rate is not only lower than the official target but it is also lower than the State Bank of Pakistan's estimates of up to 4.8% growth in this fiscal year. However, it was close to the predictions of the International Monetary Fund and the Asian Development Bank.

Pakistan has been implementing economic stabilization policies for the past four years, which have taken a heavy toll on the national output and contributed to increase in poverty, unemployment and income inequality.

For the next fiscal year 2026-27, the government has already committed with the IMF to continue with the stabilization path and gave in writing to produce Rs2.8 trillion primary budget surplus.

According to the Planning Ministry, the overall size of the economy stands at Rs126.9 trillion, which in dollar terms is $452.1 billion. At $452 billion, Pakistan's global ranking is 42nd.

Based on the population projection of the 2023 census, per capita income is Rs533,629 –higher by Rs44,511 over the last year. In dollar terms, per person income grew $150 to $1,901 in the outgoing fiscal year, according to the Planning Ministry.

The committee upward revised the quarterly GDP growth rates for the first and second quarters and approved the third quarter growth rate of 4% the outgoing fiscal year.

Agriculture

The provisional growth rates in the agriculture sector remained at 2.9%, which is better than last year's 1.53%, according to the ministry. In agriculture, important crops have shown modest growth of 0.7% due to a mixed trend in production of wheat, maize, rice, sugarcane and cotton.

Production of wheat increased to 29.6 million tons as compared to 28.4 Million tons last year posting a growth of 4.6%. Production of Rice jumped to 10 million tons as compared to 9.7 million tons last year, showing a growth of 2.8%.

Sugarcane has posted a growth of 6.2% during 2025-26 with a production of 89.5 million tons against 84.2 million tons last year.

However, the cotton crop has witnessed a contraction of 0.5% to 7.1 million bales. Maize has also declined by 2.7% to 8.8 million tons production as compared to 9.1 million tons last year.

Despite high growth of 19.74% in previous year, other crops have shown a growth of 2.43% due to high growth in gram, potato, mangoes, banana, turmeric, and chilies, according to the ministry.

Livestock has increased by 3.75% as compared to 3% due to increase in output by 3.5% and decrease in green fodder. Forestry and fishing have posted normal growth rates.

Industry

Industry in 2025-26, has shown a growth of 3.51% provisionally, which is significantly lower than the previous year. The sector is badly suffering because of high taxation, high prices of energy, and cost of borrowing and uncertain economic policies.

Despite an increase in the production of coal, the mining & quarrying industry has posted a modest growth of 0.4% because of a decrease in production of natural gas, crude oil and other minerals.

Large scale manufacturing has witnessed a growth of 6.11% with mixed trend in the production of various groups mainly due to positive contribution in food, tobacco, petroleum products, rubber products, electrical equipment, automobiles, transport equipment, furniture and football.

However, the decline in the production of electricity, gas and water supply industry and slow growth in the construction sector pulled down the overall growth in the sector, which is contributing maximum to the taxes and is the second largest job creating sector.

The electricity and gas output has contracted by 10.63% primarily due to high base effect, lower energy subsidies and slower growth in output of WAPDA & companies. As against the growth of 8.8% during last year, the construction industry increased by 5.7% due to increase in construction-related expenditures by the private sector and general government, according to the Planning Ministry.

There was a decline in subsidies by 25% from Rs1.2 trillion to Rs893 billion.

 

Services

Services industry has shown a growth of 4.1% during the outgoing fiscal year, with positive contributions from wholesale and retail trade, transport and storage, information & communication, public administration and social security and education.