Pakistan’s Economic Growth Slows to 2.0% as Industry Contracts

Pakistan’s economy grew 2.0% year over year in April-June 2026 as industry contracted, while disrupted liquefied natural gas shipments posed a separate challenge to the country’s fuel supply.

Growth slowed from 4.42% in January-March 2026. The estimate for the full 2025-26 fiscal year was revised to 3.65% from 3.70%, leaving the final quarter’s pace below the annual rate.

Industry shrank 4.7% in April-June, while agriculture grew 3.71% and services expanded 3.62%. The industrial figure included a 33.19% decline in electricity, gas and water supply. Lower subsidies, a high deflator and a strong year-earlier comparison contributed to that drop.

The contraction did not extend to every part of industry. Large-scale manufacturing grew 0.41% during the quarter, contrasting with the steep decline in electricity, gas and water supply.

Pakistan also faced pressure on imported fuel. Qatar supplied 99% of its LNG imports in 2025, leaving Pakistan heavily reliant on shipments that pass through the Strait of Hormuz. Disruptions to that route complicated its gas supply in 2026.

Pakistan returned to the spot LNG market in April 2026 after a two-year absence. It had limited success securing replacement gas because spot prices were high. By May 14, 2026, congestion in the strait was complicating deliveries, though two LNG cargoes had reached Pakistan.

“The Middle East conflict has exposed the structural vulnerabilities of South Asian LNG markets in stark terms,” said Johnson Quadros, head of gas and LNG research at Wood Mackenzie.

The economic figures and the LNG disruption describe pressures Pakistan faced during the same period. The GDP figures do not establish how much of the slowdown, if any, resulted from interrupted gas shipments.