ISLAMABAD In the first quarter (July-September) of the current fiscal year, Pakistan’s GDP grew by a meager 0.92 percent, which is a sharp decline from the 2.3 percent growth seen during the same period previous year.
According to data issued by the National Accounts Committee (NAC) on Monday, the PML-N-led coalition government claims an economic rebound, although first-quarter figures show a different picture than the growth saw during the caretaker regime last year.
A 1.15 percent increase in agriculture and a 1.43 percent increase in the services sector were the primary drivers of the modest quarterly growth. But the industrial sector declined by 1.03 percent, which hurt the economy as a whole.
The GDP growth projection for FY24 was revised downward by the NAC from 2.52 percent to 2.50 percent.
For FY25, GDP growth is predicted by the State Bank of Pakistan (SBP) to remain in the higher end of the 2.5–3.5 percent range. Likewise, a 3.2 percent economic expansion is projected by the International Monetary Fund. Additionally, the Asian Development Bank recently raised its prediction for Pakistan’s GDP growth from 2.8 percent to 3 percent.
The Planning Commission Secretary presided over the 111th NAC meeting, which was held Monday at the Pakistan Bureau of Statistics headquarters. The Q1 GDP growth rate for FY25 and the revised yearly growth rates for FY23 and FY24 were agreed at the meeting.
A closer look at the agriculture sector reveals that crop production decreased by 5.93 percent in Q1. Production of key crops fell by 11.19 percent, including 29.6 percent for cotton, 15.6 percent for maise, 1.2 percent for rice, and 2.2 percent for sugarcane. Since wheat was neither seeded nor harvested in Q1, it was unaffected.
As a result of less input consumption, such as fertilizer and insecticides, other crops rose by 2.08 percent as opposed to a 2.08 percent decline in 1QFY24. Due to decreased input prices and higher livestock products, livestock climbed by 4.89 percent compared to 4.56 percent the previous year. Additionally, the fishery and forestry sectors experienced minor growth of 0.82 and 0.78 percent, respectively.
The rate of contraction in the industrial sector decreased from 4.43 percent in 1QFY24 to 1.03 percent in 1QFY25. Declines in coal output (12.4%), gas production (6.7%), and crude oil production (19.8%) were the main causes of the 6.49 percent contraction in the mining and quarrying sector. According to the Quantum Index of Manufacturing (QIM), the Large-Scale Manufacturing (LSM) sector experienced a 0.82 percent decline.
However, there was only a slight 0.58 percent rise in the gas, power, and water supply sectors. The construction industry saw a 14.91 percent fall in input output, mostly as a result of a 16.12 percent decline in cement production.
Compared to 2.16 percent in the same month last year, services grew by 1.43 percent in 1QFY25. Wholesale and retail trade (0.51 percent), lodging and food services (4.58 percent), information and communication (5.09 percent), real estate activities (4.22 percent), education (2.03 percent), human health and social work activities (5.60 percent), and other private services (3.30 percent) were the main drivers of the growth. But the public administration and social security sector and the transportation and storage sector shrank by 4.49 percent and 0.07 percent, respectively.
The economy’s size
The most recent data from the NAC indicates that Pakistan’s GDP will be worth Rs105.6 trillion ($373.3 billion) in 2023–2024. The income per person is Rs472,263 ($1,669).
According to the NAC, upon the receipt of forward and backward population predictions based on the 2023 Population Census, the per capita income statistics for 2016–17 and beyond will be updated.
