Pakistan's Economic Growth Slows
Pakistan's economy grew by 2.0% in the quarter ending June 2026. Soaring energy prices and disruptions in liquefied natural gas (LNG) supplies from Qatar hindered recovery efforts. This growth rate was lower than the 4.42% recorded in the previous quarter. It also fell short of the 3.5% growth forecast by economists in a Bloomberg survey.
The slowdown in the April-June quarter is linked to the ongoing crisis in the Middle East. This crisis has affected energy availability and raised costs for the country. The industrial sector contracted by 4.7% during this period. However, agriculture and services managed to grow by more than 3.5%. For the full fiscal year 2026, Pakistan now expects a GDP growth rate of 3.65%. This is slightly down from a previous estimate of 3.70%.
Officials noted that the energy crisis is straining Pakistan’s budget. Costs for procuring gas and fuels continue to rise. The head of the state-owned LNG importer stated that Pakistan had to rely on costly spot purchases this year. The country usually sources 99% of its LNG imports from Qatar under long-term contracts. This shift could push the import bill to over $1 billion to secure LNG for the upcoming winter months. Flows from the Strait of Hormuz remain disrupted.
The slowdown in GDP growth is likely to affect sectors that rely on energy. This includes industry and power generation, as high energy costs continue to pressure margins. Investors will watch for further developments in LNG supply. They will also look for any potential policy responses from the government to address rising energy prices.
Based on reporting by: oilprice.com, moneycontrol.com