Pakistan GDP grew 0.92% in 1QFY25; Full year FY25 GDP growth estimated around 3%

Staff Report:
Pakistan posted GDP growth of 0.92% during 1QFY25 compared to the FY24 revised growth of 2.5%, as per the data released by the National Accounts Committee (NAC).

During 1QFY25, the modest growth of 0.92% was led by 1.43% growth in the services segment and 1.15% growth in the agriculture segment, while industries posted a decline of 1.03%.66% See Negative Business Outlook Despite Improvement

The agriculture sector posted growth of 1.15%, led by livestock and other crops. Despite a contraction of 11.19% in important crops, the agriculture segment achieved growth due to a 4.89% increase in livestock and a 2.08% rise in other crops. Among major crops, cotton declined by 29.6%, maize by 15.6%, rice by 1.2%, and sugarcane by 2.2%.

Industrial contraction was led by a 6.49% fall in the mining and quarrying industry. The industrial segment contracted by 1.03% in 1QFY25 due to a 6.5% decline in the mining and quarrying segment and a 0.82% decline in large-scale manufacturing. Within mining, crude oil production fell by 19.8%, gas by 6.7%, and coal by 12.4%. Similarly, the construction industry decreased by 14.91% due to a decline in key inputs such as cement, which fell by 16%. However, the electricity, gas, and water supply industry posted growth of 0.58%.

The services sector posted growth of 1.43%, primarily driven by 5.6% and 5.09% growth in human health and social work activities, and information and communication, respectively. Accommodation and food services, as well as wholesale and retail trade, also posted growth of 0.51% and 4.58%, respectively.
The NAC has revised FY24 GDP growth down to 2.5% from the earlier estimate of 2.52%, mainly due to a downward revision in agriculture growth to 6.18% from 6.36% and an increase in industrial contraction to 1.65% from 1.15%.

Looking ahead, Pakistan’s GDP is expected to grow at 2.5-3.0% in FY25, with the agriculture sector anticipated to grow at 1.7%, the industrial sector at 2.1%, and the services sector at 3.4%. Recently, the Asian Development Bank (ADB) revised its Pakistan GDP forecast for FY25 upward to 3% from the earlier projection of 2.8%. Meanwhile, the central bank, in its recent monetary policy statement, mentioned that “real GDP growth in FY25 is expected to remain in the upper half of the projected range of 2.5-3.5%.”