Services Sector Overtakes Agriculture as Main Driver of Economic Growth in FY25

Pakistan’s economy has experienced a notable realignment in its growth dynamics during the fiscal year 2024-25 (FY2025), according to the latest Pakistan Economic Survey. Unlike the previous year, where agriculture drove expansion, the services sector emerged as the main engine of growth this year, supported by a strong recovery in the industrial sector. The agriculture sector, which had been a key contributor to GDP growth in FY2024 with a 6.40 percent increase and a 1.48 percentage point contribution, witnessed a sharp deceleration. In FY2025, growth in agriculture dropped drastically to just 0.56 percent, contributing a modest 0.13 percentage points to GDP. Its share in the economy also dipped slightly from 24.03 percent to 23.54 percent. In contrast, the industrial sector rebounded significantly after a year of contraction. Following a negative growth of 1.37 percent in FY2024, the sector expanded by 4.77 percent in FY2025. This turnaround added 0.85 percentage points to the overall GDP growth, with the sector’s share in the economy increasing to 18.07 percent. The services sector played a leading role in sustaining economic momentum. It grew by 2.91 percent in FY2025, up from 2.19 percent in the previous year. The sector contributed 1.70 percentage points to the total GDP growth, making up nearly two-thirds of the year’s overall economic expansion. Its share in GDP rose to 58.39 percent, further consolidating its dominance. As a result of these sectoral shifts, Pakistan’s overall GDP, measured by Gross Value Added, grew by 2.68 percent in FY2025—an improvement over the 2.51 percent growth recorded in FY2024. While the combined output of the agriculture and industry sectors rose by 2.35 percent, their contribution was overshadowed by the stronger performance of services, which ultimately drove the national economic growth.