Pakistan trims FY26 GDP growth forecast to 3.65 percent

Pakistan's government lowered its gross domestic product growth estimate to 3.65 percent for fiscal year 2026, a modest reduction from its May projection of 3.70 percent, according to official statements. The revision reflects a deceleration in key economic sectors, though per capita income in dollar terms showed improvement, indicating uneven progress in the country's economic recovery.

The latest downward adjustment underscores Pakistan's struggle to maintain momentum in its growth trajectory. The government had initially targeted 4.0 percent growth for FY26 before subsequently reducing expectations twice within the same fiscal period.

The National Accounts Committee, at its 118th meeting, approved revised sectoral growth rates that show mixed performance across the economy. Agriculture is now projected to grow 3.50 percent, down from the earlier 2.89 percent estimate. However, industrial sector growth was cut to 3.34 percent from 3.51 percent, while services growth fell to 3.81 percent from 4.09 percent, indicating that weakness in both secondary and tertiary sectors drove the overall revision.

The moderated growth outlook reflects broader economic headwinds facing Pakistan, though officials maintained that the country continues on a recovery path despite the slower-than-anticipated expansion.