Pakistan's GDP grows 1.73% in Q2

Islamabad: Pakistan's GDP growth rate for the second quarter of the current financial year, ending June 30, was 1.73%, the government announced on Wednesday.

It also updated the GDP estimate for the first quarter, raising it to 1.34% from the earlier forecast of 0.92%. This revision was mainly due to stronger-than-expected growth in the services sector.

The news came just hours after the International Monetary Fund (IMF) reached a deal with Pakistan's government for $1.3 billion in new financing. The IMF praised Pakistan's progress in improving its macroeconomic stability.

Pakistan’s central bank has set a full-year GDP growth target of between 2.5% and 3.5% and expects economic activity to improve further. Arif Habib Limited, a financial services company, noted that while the economy has shown resilience, there are sectoral differences. The agriculture and services sectors have continued to grow, but the industrial sector faced challenges. In the second quarter, agriculture grew by 1.10% year-on-year, and services expanded by 2.57%. However, the industrial sector contracted by 0.18%.

Looking ahead, Arif Habib Limited projects a GDP growth rate of 2.75% for FY25, with the services sector expected to lead the growth. Topline Securities, a brokerage firm, also revised the first-quarter growth estimate to 1.34%, but noted that overall growth for the first half of FY25 averages 1.54%, lower than 2.33% in the same period last year.