Pakistan’s agriculture sector expanded by 2.9 percent in the first quarter of fiscal year 2026, showing a notable improvement from the 1.0 percent growth recorded in the same period last year, according to the Monthly Economic Update and Outlook released by the Finance Division. This growth was driven by stronger livestock performance, increased access to credit for farmers, and higher use of agricultural inputs.

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Mixed crop performance Credit, machinery imports boost activity Outlook and importance

Official data show that livestock, the largest contributor to the agriculture sector, grew by 6.3 percent, compared with 2.0 percent in the corresponding period last year. Analysts say lower input costs, especially for green fodder, helped this sub-sector’s performance.

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Mixed crop performance

While livestock expanded robustly, the crop sub-sector showed mixed results. Important crops excluding wheat recorded a slight contraction of 0.7 percent, an improvement from the sharp decline of 13.1 percent seen in the corresponding quarter of FY2025. Other crops also contracted, but the decline was much smaller than last year’s double-digit fall, reflecting some stabilisation in agricultural output.

Credit, machinery imports boost activity

Agricultural credit disbursement rose by 11.4 percent, reaching Rs1,411.6 billion, compared with Rs1,266.7 billion in the previous year. Increased credit flow helped farmers meet operational costs, purchase inputs, and expand working capital. Imports of agricultural machinery and implements also jumped by 21.6 percent, indicating growing investment in farm mechanisation.

Fertiliser use during the Rabi season showed a significant increase in urea offtake, though use of DAP declined, highlighting shifting patterns in input consumption. Other sub-sectors such as forestry and fishing also recorded moderate growth, contributing to the overall positive trend.

Outlook and importance

The Finance Division noted that improved access to credit, higher input demand, and stabilising input prices contributed to the sector’s resilience in the early part of FY2026. While weather patterns and crop-specific conditions remain key variables, the agriculture sector’s rebound is expected to support broader economic activity, especially given its central role in employment, rural incomes, and food security.