By Moaaz Manzoor

Pakistan’s economy maintained its gradual recovery momentum during the quarter ending March 2026, with real GDP growth reaching 3.99 percent amid continued expansion across the agriculture, industry, and services sectors, according to data released by the State Bank of Pakistan (SBP).

The latest quarterly national accounts data showed that gross domestic product at constant basic prices increased to Rs10.71 trillion in March 2026, compared with Rs10.64 trillion in December 2025 and Rs10.29 trillion in March 2025.

Economic growth stood at 3.99 percent during the March 2026 quarter, compared with 4.05 percent in December 2025 and 2.56 percent in March 2025, indicating sustained improvement in overall economic activity despite lingering structural challenges and external-sector risks.

The agriculture sector maintained a stable growth trajectory during the latest quarter. According to SBP data, the sector expanded to Rs2.47 trillion in March 2026, compared with Rs2.47 trillion in December 2025 and Rs2.40 trillion in March 2025.

Growth in agriculture increased to 3.01 percent in March 2026 from 2.64 percent in December 2025 and 2.39 percent in March 2025.

The sector continued benefiting from improved livestock performance and recovery in selected crops, despite climate-related risks and uneven output trends across some agricultural segments.

Industrial activity also remained on a recovery path during the review period. The industrial sector increased to Rs1.93 trillion in March 2026, compared with Rs1.93 trillion in December 2025 and Rs1.84 trillion in March 2025.

Industrial growth stood at 4.65 percent in March 2026, compared with 6.68 percent in December 2025 and 0.75 percent in the corresponding period last year.

Although industrial growth slowed from the previous quarter, the sector continued to benefit from recovering manufacturing activity, easing inflation, and improving business confidence. Large-scale manufacturing, construction-related activity, and stronger domestic demand supported broader industrial performance during FY26.

Meanwhile, the services sector remained the largest contributor to overall GDP growth. The sector expanded to Rs6.31 trillion in March 2026, compared with Rs6.25 trillion in December 2025 and Rs6.05 trillion in March 2025.

Growth in services increased to 4.18 percent during the latest quarter, compared with 3.83 percent in December 2025 and 3.19 percent a year earlier.

The expansion reflected continued growth in wholesale and retail trade, communication, transport, finance, and public services.

The latest quarterly data suggest that Pakistan’s economy continued to stabilise during FY26 after facing significant macroeconomic imbalances and external-sector pressures in previous years.

However, challenges persist across various sectors of the economy. Agriculture remains exposed to floods, heatwaves, and water-related risks, while industrial activity continues to be constrained by high energy costs, taxation pressures, and tight financing conditions.

At the same time, external risks associated with oil prices and geopolitical developments in the Middle East continue to create uncertainty for inflation and the balance of payments.

Despite these challenges, the latest quarterly data indicate that Pakistan’s recovery momentum remained intact during the March 2026 quarter, supported by broad-based growth across agriculture, industry, and services sectors.

Credit: INP-WealthPk