Pakistan’s growth rate has fallen to 0.3 percent in the current fiscal year which saw various restrictions cripple industries, halt exports, puncture services, and depleting reserves to bring the country closer to default.
The 106 meeting of the National Accounts Committee (NAC) to review the final, revised, and provisional estimates of Gross Domestic Product (GDP) for the years 2020-21, 2021-22, and 2022-23 respectively was held on Wednesday. The Secretary, MO PD&SI chaired the meeting.
The final growth rate of GDP for the year 2021-22 has been estimated at 5.77 percent which was 5.74 percent in the revised estimates. The revised growth rate of GDP for the year 2021-22 is 6.10 percent which was provisionally estimated at 5.97 percent.
Agri, Industries Down
In the revised estimates, agriculture has slightly declined from 4.40 percent to 4.27 percent despite improvement in the crops sub-sector (from 6.58 percent to 8.19 percent) due to livestock (decreased from 3.26 percent to 2.25 percent) and forestry (from 6.13 percent to 4.07 percent).
The industrial sector has slightly declined from 7.19 percent to 6.83 percent in the revised estimates due to a decrease in electricity, gas, and water supply from 7.86 percent to 3.14 percent. However, growth in LSM improved from 10.48 percent to 11.90 percent.
The services sector has improved from 6.19 percent to 6.59 percent due to wholesale and retail trade (from 10.04 percent to 10.32 percent), information & communication (from 11.90 percent to 16.32 percent), finance & insurance (from 4.93 percent to 7.18 percent), public administration and social security (from-1.23 percent to 1.81 percent), and other private services (from 3.76 percent to 4.77 percent)
The provisional growth rate of GDP for the year 2022-23 is estimated at 0.29 percent. The growth of the agricultural, industrial, and services sectors has been estimated at 1.55 percent -2.94 percent, and 0.86 percent respectively.
In the agriculture sector, provisional growth in important crops is 3.20 percent due to a decrease in the production of cotton (41 percent from 8.33 to 4.91 million bales) and rice (21.5 percent from 9.32 to 7.32 million tons).
Wheat, Sugarcane Recover from Post-Flood Aftershocks
However, positive growth has been observed in wheat (5.4 percent from 26.208 to 27.634 million tons), sugarcane (2.8 percent from 88.65 to 91.11 million tons), and maize (6.9 percent from 9.52 to 10.183 million tons). Other crops posted modest growth of 0.23 percent due to a slight increase in the production of pulses, vegetables, fodder, oil seeds, and fruits. The provisional growth in livestock, forestry, and fishing is 3.78 percent, 3.93 percent, and 1.44 percent respectively.
The provisional growth in the industrial sector is -2.94 percent. The growth in mining and quarrying is -4.41 percent due to a decline in the production of natural gas, crude oil, and exploration cost.
Large Scale Manufacturing driven by QIM has posted a negative growth of 7.98 percent due to Food (-8.71 percent), Tobacco (-23.78 percent), Textile (-16.03 percent), Coke and Petroleum Products (-10.24 percent), Chemicals (-6.29 percent), Pharmaceuticals (-23.20 percent), Fertilizers (-9.54 percent), Non-metallic products which includes cement (-10.75 percent ), Iron & Steel Products (4.02 percent), Electrical equipment (-11.15 percent), Automobiles (-46.01 percent) and other transport equipment (38.91 percent).
The Electricity, Gas, and Water industry show a growth of 6.03 percent mainly due to higher output reported by the sources. The value added in the construction industry, mainly driven by construction-related expenditures by industries, has registered a negative growth of 5.53 percent mainly due to conservative reporting of construction-related expenditure by private as well as public sector enterprises and an unusual increase in relevant deflator of the WPI building material.
Services Improve Marginally But Trade Takes A Big Hit
The provisional growth in the services sector shows a slow growth of 0.86 percent but with mixed trends within the industries. The Wholesale and Retail Trade industry declined by -4.46 percent due to a decline in the output of crops (-4.57 percent), LSM (-8.11 percent), and imports (-12.68 percent).
The transportation & Storage industry has increased by 4.73 percent whereas accommodation and food services activities have grown by 4.11 percent.
Information and Communication increased by 6.93 percent due to an increase in telecommunication.
The Finance and Insurance industry shows an overall decrease of -3.82 percent mainly due to the high CPI-based deflator (26 percent). Meanwhile, Real Estate activities grew by 3.72 percent while public administration and social security (general government) activities posted a negative growth of 7.76 percent due to the high deflator.
Education witnessed a growth of 10.44 percent due to public sector expenditure. Human health and social work activities also increased by 8.49 percent due to the general government.
The provisional growth in other private services is 5.0 percent.
The revised and provisional estimates provided by the NAC offer valuable insights into the economic landscape of the country. The government and relevant stakeholders can utilize this information to make informed decisions and formulate effective policies for the future.
Overall, the meeting served as a platform to analyze and understand the GDP performance, sectoral growth, and the trajectory of the country’s economy. The findings will contribute to a comprehensive understanding of economic trends and aid in the formulation of strategies to enhance economic growth and stability in the years to come.