The National Accounts Committee (NAC) has determined Q3 and annual estimates for the financial year 2023-24. It said GDP for Q3 in FY24 has shown a growth of 2.09 percent.
The committee approved the revised first and second-quarter estimates for 2023-24. Overall GDP for Q1 and Q2 for FY 2023-24 has witnessed a revised growth of 2.71% and 1.79% as compared to 2.50% and 1.0% estimated in 108th NAC meeting.
While the revised growth in agriculture during Q1 has remained stable at 8.59% vs. 8.58% presented earlier, the growth in Q2 has improved from 5.02% to 5.83% mainly due to upward revisions in important crops (from 8.12% to 12.92%) and other crops (from -0.31% to 0.65%).
The 109th meeting of the National Accounts Committee (NAC) was held today in the N3C, Pakistan Bureau of Statistics, Headquarters, Statistics House, G-9/1, Islamabad. The Secretary, M/O PD&SI chaired the meeting. The committee approved the quarterly GDP growth rates for Q1 (Revised), Q2 (Revised), and Q3 during FY 2023-24 and annual growth rates for 2021-22 (Final), 2022-23 (Revised) and 2023-24 (Provisional).
Despite significant improvement in mining and quarrying from 7.78% to 15.46%, the industrial activities have posted a downward revision from -0.24% to -2.44% due to a decline in electricity, gas and water supply from -12.70 to – 27.62% in the revised estimates for Q1.
Industry, Services Rebound
However, Q2 growth in industrial activities has witnessed upward revision from -0.84% to 0.09% on account of positive changes in mining and quarrying (from -4.17% to 4.39%) and construction (from -17.59% to -10.85%) despite downward revisions in large-scale manufacturing (from 0.48% to -0.83%) and electricity, gas and water supply (from 1.54% to -0.28%).
The revised growth in services during Q1 and Q2 has improved from 0.92% and 0.01% to 2.02% and 0.75% respectively due to improvements in information and communication, public administration and social security, education and human health and social work activities.
Agriculture Continues to Contribute Positively
The economy has posted a stable growth of 2.09% during Q3 of FY 2023-24. The growth in agriculture, industry and services stands at 3.94%, 3.84%, and 0.83% respectively. During Q3, all the constituents of agriculture have contributed positively e.g. important crops (2.89% due to wheat), other crops (1.14%), cotton ginning (61.75%), and livestock (4.20%). Despite negative growth of the construction industry (-15.75%), the industrial growth of 3.84% is attributable to mining & quarrying (0.63), large-scale manufacturing (1.47%), and electricity, gas and water supply (37.3%).
The overall growth in services is positive (0.83%) during Q3 2023-24 albeit having mixed trends in its constituents i.e. wholesale & retail trade (0.38%), transport& storage (0.91%), information and communication (-5.92%), finance & insurance activities (-7.11%), public administration and social security (-6.38%) and education (10.38%).
The committee approved the overall final growth of annual GDP during FY 2021-22 at 6.18%, which was estimated at 6.17% in the 107th meeting. The final growth rates in agriculture, industry, and services during FY 2021-22 are 4.21%, 7.01%, and 6.69% respectively. Further, the revised growth during FY 2022-23 is -0.21%, which was estimated at -0.17% in the previous meeting.
In the revised estimates, agriculture has improved from 2.25% to 2.27%, the industry has remained stable i.e. -3.74% vs. -3.76%, whereas services has slightly declined from 0.07% to -0.01% due to a downward revision in education (from 9.94% to 5.15%) and human health & social work activities (10.57% to 8.87%).
The committee also approved the provisional growth of GDP at 2.38% during ongoing FY 2023-24. The provisional growth in agriculture is 6.25%, whereas it is 1.21% for both industry as well as services. The healthy growth of agriculture is mainly due to double-digit growth in important crops i.e. 16.82% on the back of bumper crops of wheat (11.64% from 28.16 to 31.44 MT), cotton (108.22% from 4.91 to 10.22 million bales) and rice (34.78% from 7.32 to 9.87 million Tons).
Two important crops i.e. sugarcane (-0.39% from 87.98 to 87.64 Million Tons) and maize (-10.35% from 10.99 to 9.85 million tons) have posted negative growth. Further, provisional growth in other crops is 0.90%, cotton ginning & miscellaneous component 47.23%, livestock 3.89%, and forestry 3.05%.
Industry in 2023-24, has shown a growth of 1.21% provisionally. The mining & quarrying industry has witnessed a growth of 4.85% because of an increase in the production of crude oil (1.51%), coal (37.72%), other minerals (7.57%) e.g. limestone (7.95%), marble (23.22%).
LSM Improves Slightly, Many Fall
Large-scale manufacturing, which is based on the Quantum Index of Manufacturing (QIM), has witnessed a nominal growth of 0.07% with mixed trend in the production of various groups e.g. Food (+1.69%), Beverages (-3.43%), Textile (-8.27%), Tobacco (-33.59%), Non-metallic mineral products (-3.89%), Wood (+12.09%), Coke & Petroleum (+4.85%), and Pharmaceuticals (+23.19%).
The electricity, gas, and water supply industry has shown a negative growth of 10.55% because of a decrease in subsidies in real terms due to the high deflator. The construction industry increased by 5.86% due to an increase in construction-related expenditures by private and public sector enterprises.
Services industry has also shown a growth of 1.21% in 2023-24. Detailed analysis of the industry reflects a mixed trend. Wholesale and retail trade has witnessed a growth of 0.32% because of positive growth in agriculture output. The transport and storage industry has increased by 1.19% because of the increase in output of railways, water transport, and road transport.
Inflation Stalls Real Growth in Information, Finance, Social Security
Due to high inflation, real growth in Information & Communication, Finance & Insurance, and Public Administration and Social Security industries has become negative at 3.02%, 9.64%, and 5.25% respectively.
Further, both the Education and Human Health and Social Work industries have posted positive growth at 10.30% and 6.80% respectively. Other private services have been estimated at 3.58% on the basis of indicators received from the sources.
Overall the forum appreciated the efforts of the National Accounts team of PBS and key stakeholders including the Ministry of Planning Development and Special Initiatives, the Ministry of Finance, and State Bank of Pakistan in preparation for quarterly GDP.
