Pakistan’s economy expanded by 1.73% in the second quarter of fiscal year 2025, despite a 0.18% contraction in the industrial sector, the National Accounts Committee (NAC) reported yesterday.

The growth was primarily driven by the services sector, which expanded by 2.57%, and agriculture, which grew by 1.10%. The NAC also revised the first quarter growth upward to 1.34% from the previously reported 0.92%, citing improvements in services and a less severe industrial decline.

In the agricultural sector, crops contracted by 5.38% during Q2, with major crops falling by 7.65%. Cotton production dropped significantly by 30.7% to 7.084 million bales, while maize declined by 15.4% to 8.24 million tons. Rice and sugarcane also saw reductions of 1.4% and 2.3% respectively. Wheat area cultivation decreased by 6.8% compared to last year.

Livestock emerged as a bright spot, growing by 6.51% compared to 2.96% in the same quarter last year, attributed to a lower base effect and reduced intermediate consumption of fodder.

The industrial sector’s contraction of 0.18% represents an improvement from the 1.81% decline recorded in Q2 of the previous fiscal year. Mining and quarrying contracted by 3.29%, with notable declines in coal (-6.34%), gas (-6.16%), and crude oil (-11.4%) production. Large-scale manufacturing fell by 2.86%, dragged down by sugar (-12.63%), cement (-1.82%), and iron & steel (-17.86%).

Despite wholesale and retail trade contracting by 1.13%, the services sector’s 2.57% growth outpaced last year’s 1.32%. Information and communication (8.45%), finance and insurance (10.21%), and public administration (9.10%) posted strong performances, benefiting from slowing inflation.

The NAC’s 112th meeting acknowledged the collaborative efforts of the Pakistan Bureau of Statistics, Ministry of Planning, Ministry of Finance, and State Bank of Pakistan in preparing the quarterly GDP estimates.