Pakistan's Electricity Sector Leads Industrial Growth at +28.9% — What the Numbers Mean for Energy Investment

Pakistan's industrial sector posted 4.8% growth in FY2024-25, rebounding sharply from a 1.4% contraction the previous year — and within that rebound, one sub-segment drove disproportionately: Electricity, Gas, and Water Supply grew 28.9%, recovering from a 19.9% contraction the year before. For investors trying to read where Pakistan's industrial economy is headed, that single line item is the most informative number in the official data.

The headline numbers

Federal Government data, structured under the National Economic Transformation Plan (URAAN Pakistan) framework with Special Investment Facilitation Council (SIFC) oversight, sets the FY2025-26 industrial growth target at 4.3%:

• Mining and quarrying: 3.0% target growth (despite contracting 3.4% in FY24-25 and 4.0% the year before — recovery hinges on mineral-extraction and exploration improvements).
• Manufacturing: 4.7% target growth, including 3.5% increase in Large Scale Manufacturing (LSM) — versus FY24-25's LSM contraction of 1.5%.

The drivers expected to enable the recovery: low base of FY24-25, improved energy supply, lower interest rates, exchange-rate stability, and easing global commodity prices. Continued positive momentum is expected in Small and Medium Enterprises (SMEs), utilities, construction, and slaughtering.

What 28.9% growth in Electricity/Gas/Water Supply actually means

The Electricity-Gas-Water sub-segment grew 28.9% in FY24-25, against the previous year's 19.9% contraction. That's not a normal annual swing — it reflects the underlying volatility of Pakistan's power sector:

• The contraction year (FY23-24) reflected acute gas shortages affecting captive and grid generation, plus circular-debt-driven IPP under-utilisation that suppressed measured output.
• The rebound year (FY24-25) captured the easing of those constraints — improved fuel allocation, partial circular-debt settlements, better IPP-load-dispatch coordination, and continued investment in renewable capacity that came online during the period.

Structurally, the sector remains under stress. But the rebound demonstrates that when the operating constraints ease — even modestly — measured output recovers fast.

Why investors should care

For domestic and foreign capital evaluating Pakistani industrial-and-energy opportunities, the 28.9% rebound carries three signals:

• Demand is structurally there — Pakistan's industrial economy and consumer base want more electricity, gas, and water than is being supplied. The contractions reflect supply-side constraints, not demand weakness. That makes investments aimed at expanding supply (generation, transmission, storage, distribution upgrades) addressable at scale.
• Policy headroom exists — the SIFC structure and URAAN Pakistan plan are designed specifically to attract investment into sectors where private capital can solve constraints. Energy infrastructure is one of the most explicitly named beneficiaries.
• Reform commitment is real — the federal focus on Disco privatisation (FESCO, GEPCO, IESCO), circular-debt resolution, and tariff rationalisation collectively signal that the structural constraints suppressing FY23-24 output are getting addressed rather than tolerated.

Construction's 6.6% growth tells a related story

Alongside Electricity-Gas-Water, the construction sector grew 6.6% in FY24-25 versus a 1.1% contraction the previous year. The implication: capital formation is reaccelerating — and that in turn drives downstream demand for electrical equipment, switchgear, panels, transformers, cables, and the entire industrial-supply ecosystem that Engineering Post's primary readership occupies.

The mining and quarrying drag

Mining and quarrying has been a consistent disappointment, contracting 3.4% in FY24-25 versus 4.0% contraction the prior year. The federal government is targeting a 3.0% recovery for FY25-26, which would require resolving ongoing challenges in mineral extraction and exploration — particularly relevant for the country's iron-ore, copper, and rare-earth opportunities that have been identified but under-developed.