National Accounts Committee Predicts GDP Growth to Increase in FY22

The National Accounts Committee has estimated Pakistan’s economy to grow by 5.97 percent for the ongoing fiscal year (FY22).

The Gross Domestic Product (GDP) of the country at current market prices has reached Rs. 66.949 trillion in 2021-22 which has resulted in an increase in per capita income from Rs. 268,223 in 2020-21 to Rs. 314,353 in 2021-22. The per capita income in dollar terms has increased from $1676 in 2020-21 to $1798 in 2021-22. Moreover, the volume of the economy in 2021-22 stands at $383 billion.

The 105th meeting of the National Accounts Committee to review the final, revised, and provisional estimates of GDP for the years 2019-20, 2020-21, and 2021-22 respectively was held on Wednesday.

The provisional GDP estimates for the year 2020-21 and revised GDP estimates for the year 2019-20 presented in the 104th meeting of the NAC held in January 2022 have been updated on the basis of the latest available data.

GDP growth rate for 2021-22

The provisional GDP growth rate for the year 2021-22 is estimated at 5.97 percent. Broad-based growth was witnessed in all sectors of the economy. The growth of agricultural, industrial, and services sectors is 4.40 percent, 7.19 percent, and 6.19 percent respectively.

The growth of important crops during this year is 7.24 percent. The growth in production of important crops namely cotton, rice, sugarcane, and maize is estimated at 17.9 percent, 10.7 percent, 9.4 percent, and 19.0 percent respectively.

The cotton crop increased from 7.1 million bales reported last year to 8.3 million bales; Rice production increased from 8.4 million tons to 9.3 million tons; sugarcane production increased from 81.0 million tons to 88.7 million tons; maize production increased from 8.4 million tons to 10.6 million tons respectively, while wheat production decreased from 27.5 million tons to 26.4 million tons.

Other crops showed growth of 5.44 percent mainly because of an increase in the production of pulses, vegetables, fodder, oilseeds, and fruits. The livestock sector is showing a growth of 3.26 percent. The growth of forestry is 3.13 percent and fishing is at 0.35 percent.

GDP growth rate for 2019-20

The final growth rate of GDP for the year 2019-20 has been estimated at -0.94 percent which was -1.0 percent in the revised estimates. The revised growth rate of GDP for the year 2020-21 is 5.74 percent which was provisionally estimated at 5.57 percent. The crops sub-sector has improved from 5.92 percent to 5.96 percent.

The other crops have improved from provisional growth of 8.08 percent to 8.27 percent in revised estimates. The growth of the industrial sector in the revised estimates is 7.81 percent which was 7.79 percent in the provisional estimates while the growth of the services sector has improved from 5.7 percent to 6.0 percent.

Industrial sector

The overall industrial sector shows an increase of 7.19 percent. The mining and quarrying sector has decreased by 4.47 percent due to a decline in the production of other minerals as well as a decline in exploration costs. The Large Scale Manufacturing industry is driven primarily by QIM data (from July 2021 to March 2022) which shows an increase of 10.4 percent.

Major contributors to this growth are food (11.67 percent), tobacco (16.7 percent), textile (3.19 percent), wearing apparel (33.95 percent), wood products (157.5 percent), chemicals (7.79 percent), iron & steel products (16.55 percent), automobiles (54.10 percent), furniture (301.83 percent) and other manufacturing (37.83 percent).

The electricity, gas, and water industry shows a growth of 7.86 percent mainly due to an increase in subsidies in 2021-22. The value-added in the construction industry, mainly driven by construction-related expenditures by industries, has registered a modest growth of 3.14 percent mainly due to an increase in general government spending.

Services sector

The services sector shows a growth of 6.19 percent. The wholesale and retail trade industry grew by 10.04 percent. It is dependent on the output of agriculture, manufacturing, and imports. The growth in trade value-added relating to agriculture, manufacturing, and imports stands at 3.99 percent, 9.82 percent, and 19.93 percent respectively.

Transportation & storage industry has increased by 5.42 percent due to an increase in gross value addition of railways (41.85 percent), air transport (26.56 percent), road transport (4.99 percent), and storage.

Accommodation and food services activities have increased by 4.07 percent. Similarly, information and communication increased by 11.9 percent due to improvements in telecommunication, computer programming, consultancy, and related activities.

The finance and insurance industry shows an overall increase of 4.93 percent mainly due to an increase in deposits and loans. Real estate activities grew by 3.7 percent while public administration and social security (general government) activities posted negative growth of 1.23 percent due to high deflator. Education has witnessed a growth of 8.65 percent due to public sector expenditure.

Human health and social work activities also increased by 2.25 percent due to general government expenditures. The provisional growth in other private services is 3.76 percent.