Economy May 13, 2026 07:23 AM

Pakistan’s economy grows 3.99% in Q1 2026 as services drive expansion

Services accelerate while industry eases and agriculture posts a modest uptick in January-March quarter

By Maya Rios

Pakistan’s gross value added rose 3.99% year-on-year in the January-March 2026 quarter, the Bureau of Statistics reported Wednesday. Growth slipped slightly from the 4.05% rate in the prior quarter, with the services sector leading the expansion, industry moderating and agriculture recording a modest acceleration.

Pakistan’s economy grows 3.99% in Q1 2026 as services drive expansion

Key Points

  • Overall gross value added rose 3.99% year-on-year in Jan-Mar 2026, reported by the Bureau of Statistics.
  • Services led growth with a 4.18% increase, up from 3.83% in Q4 2025; industry slowed to 4.65% from 6.68%; agriculture accelerated to 3.01% from 2.64%.
  • Q1 2026 growth of 3.99% was slightly below Q4 2025's 4.05% but above Q3 2025's 3.92%.

The Bureau of Statistics reported Wednesday that Pakistan's gross value added increased by 3.99% year-on-year in the January-March quarter of 2026.

This outcome represents a small decline from the 4.05% expansion recorded in the quarter ending December 2025. Despite the marginal slowdown relative to the immediate prior quarter, the first quarter pace of 3.99% exceeded the 3.92% growth documented in the third quarter of 2025.

Sector contributions

The services sector was the primary driver of growth in the January-March quarter, advancing 4.18% year-on-year. That rate was higher than the 3.83% pace posted by services in the October-December 2025 quarter.

Industry expanded at a 4.65% year-on-year clip in the first quarter, a noticeable deceleration from the 6.68% gain recorded in the previous quarter. Meanwhile, agriculture posted a 3.01% increase, an acceleration relative to the 2.64% growth rate seen in the October-December period.


Context within recent quarters

The 3.99% gain in the January-March quarter sits below the 4.05% expansion in the December 2025 quarter, yet it is above the 3.92% pace recorded in the third quarter of 2025. The data indicate a mixed pattern across major sectors, with services strengthening, industry easing back, and agriculture showing a modest pickup.

Implications for sector-focused observers

  • Services: Continued acceleration in the services sector supported overall growth in Q1 2026.
  • Industry: The slowdown in industrial growth from 6.68% to 4.65% signals a moderation in activity compared with the prior quarter.
  • Agriculture: Agricultural output recorded a modest increase versus the previous quarter's rate.

The Bureau of Statistics released these headline and sectoral rates as the official measure of gross value added for the January-March 2026 quarter.

Risks

  • Momentum risk as overall growth slowed slightly from 4.05% in Q4 2025 to 3.99% in Q1 2026 - this is relevant to policymakers and sectors tied to aggregate demand (services, industry).
  • Industrial moderation from 6.68% to 4.65% creates uncertainty for sectors and markets sensitive to manufacturing and industrial output.
  • Agriculture's modest acceleration to 3.01% from 2.64% leaves limited visibility on the strength of agricultural contributions going forward; this affects agriculture-related markets.

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