The country’ Gross Domestic Product (GDP) is estimated to have posted a growth of one percent in the 2nd quarter of current fiscal year 2023-24 (FY24) compared to the revised 2.50 percent in the 1st quarter and 2.20 percent in 2nd quarter of last fiscal year 2022-23.
The 108th meeting of the National Accounts Committee (NAC) to review the quarterly estimates of GDP for Q1 and Q2 for the years 2023-24 was held on Thursday, chaired by Secretary Ministry of Planning, Development & Special Initiatives.
The 107th NAC meeting held in November 2023 approved the introduction of Quarterly National Accounts (QNA) in the statistical system of the country. QNA provide the pulse of the economy at a shorter interval as compared to the Annual National Accounts (ANA).
The committee approved the revised first quarter estimates of 2023-24. Overall GDP for Q1 for financial year 2023-24 has witnessed a revised growth of 2.50 percent as compared to 2.13 percent estimated in 107th NAC meeting.
Growth in agriculture has witnessed a healthy revision to 8.58 percent from 5.06 percent mainly due to upward revisions in crops posting a double digit growth of 17.66 percent as compared to 6.13 percent. The important crops, which were previously estimated based on area, has witnessed a phenomenal growth of 31.47 percent because of very low base in 2022-23 and significant increase in production in final estimates of cotton (increased by 108.2 percent to 10.22 Million bales this year against 4.91 million bales last year), rice (increased by 34.8 percent to 9.87 million tons vs. 7.32 million tons last year) and maize (5.6 percent).
Despite improvement in mining and quarrying (from 2.15 percent to 7.78 percent), industry has witnessed a downward revision to -0.24 percent as compared to growth of 2.48 percent mainly due to downward revisions in LSM (from 0.68 percent to -0.87 percent in QIM), electricity, gas and water supply (from 0.08 percent to -12.70 percent) and construction (from 1.73 percent to 0.74 percent). The services have posted a modest improvement from 0.82 percent to 0.92 percent due to finance and insurance (from -12.79 percent to -2.88 percent).
Q2 Performance
During Q2 2023-24, the economy posted a modest growth of 1.0 percent. Agriculture has shown a growth of 5.02 percent as compared to same period of last year mainly due to healthy growth in important crops (8.12 percent) because of significant growth in the final production of cotton, rice and maize, first estimate of wheat (6.7 percent increase in area) and cotton ginning (53.6 percent). Livestock is at the same level while forestry and fishing have also retained their normal growth.
Industry in Q2, like Q1, has shown a negative growth (-0.84 percent) as compared to Q2 last year. Mining & quarrying industry has witnessed negative growth of 4.17 percent because of decrease in production of gas (-5.04 percent), marble (-40.13 percent), limestone (-20 percent) etc. and decline in exploration cost.
Large scale manufacturing, which is based on Quantum Index of Manufacturing (QIM), has witnessed a positive growth of 0.35 percent due to increase in Cooking oil, Garments, Fertilizers, etc. Electricity, gas and water supply industry has shown a positive growth of 1.54 percent because of increase in output of IPPs, Hydro and Nuclear plants. Construction industry declined to -17.59 percent due to decrease in production of cement (-8.7 percent) and iron & steel (-2.5 percent) as well as decline in general government expenditure.
Services industry has shown a nominal growth of 0.01 percent in Q2 of 2023-24. Detailed analysis of the industry reflects a mixed trend. Wholesale and retail trade has witnessed a growth of 2.11 percent because of positive growth in agriculture output and LSM. Transport and storage industry has increased by 1.13 percent because of increase in output of railways and road transport.
Due to high inflation, real growth in Information & Communication, Finance & Insurance and Public Administration and Social Security industries has become negative at 5.43 percent, 11.1 percent and 16.18 percent respectively. Further, both Education and Human health and Social Work industries have posted negative growth at 0.85 percent and 2.53 percent respectively. Other private services have been estimated at 3.63 percent on the basis of indicators received from the sources.
Overall the forum appreciated the efforts of National Accounts team of PBS and key stakeholders including Ministry of Planning Development and Special Initiatives, Ministry of Finance and State Bank of Pakistan in preparation of quarterly GDP.
