ISLAMABAD: At least three important factors caused a crucial setback to the country’s dismal economic growth rate this year even though major contributors to GDP missed their targets.
Informed sources told Dawn that during a presentation on the performance of macroeconomic indicators, the Annual Plan Coordination Committee (APCC) was informed on Thursday that the most crucial setback was about 17.5 per cent fall in the production of cotton crop this year owing to two consecutive years of water scarcity.
Major crops including wheat and construction sector were the two other key factors pulling down the growth rate. Pakistan GDP growth rate is estimated to have stood at 3.28pc during current fiscal year, missing a 6.2pc target by a wide margin. One area that extended a crucial helping hand to industry, on the other hand, was almost 41pc growth in electricity generation and gas distribution against its targeted growth of just 7.5pc.
The sources said the meeting was informed that agriculture sector posted a growth rate of just 0.8pc against a target of 3.8pc. Important crops were estimated to grow by 3pc but these actually posted a fall of 6.5pc.
Cotton ginning was targeted to go up by 8.9pc by its output actually fell down by 12.7pc when compared to last year. That meant the combined impact was negative 21.5pc. It was reported that there was massive decline in cotton out as total cotton output stood at 8.98m bales against a target of 14.37 million bales set for the current fiscal year.
The decline in cotton production was attributed to shortage of irrigation water, use of lower inputs – inferior quality of seeds, fertiliser at early stage of crop and reduction of 12pc in sown area.
Wheat crop production increased minimally by 0.5pc compared to the last year but fell significantly behind target due to wheat diseases such as rust and smut affecting the overall yield as per acre of the crop and then a last phase adverse weather conditions.
It was reported that initial estimates put the total wheat output at 24.268m tonnes during the just concluded crop season against a target of 25.56m tonnes. About 1.213m tonnes were reported to have lost due to recent adverse thunderstorms and rains in Punjab and the arid zones.
Some participants were of the view that losses in Punjab appeared to be on the higher side and would be known after a couple of weeks because crops in many parts were still in the open fields.
The meeting was informed that production of rice registered a decline of 3.3pc, whereas production of sugarcane also reduced by 19.4pc over the last year’s production. The area sown for rice and sugarcane also decreased by 3.1pc and 17.9pc respectively. All these factors contributed to the decline in projected growth target of agriculture sector.
The APCC was reported that ‘other crops’ output also fell short of targets as they posted a growth of 1.9pc against 3.5pc. The growth in fishery was recorded at 0.8pc against the target of 1.8pc for the current fiscal year and growth in forestry stood at 6.5pc against a target of 8.5pc.
The details presented to the APCC also showed a poor performance in other sectors. The overall industry grew a paltry 1.4pc against a target of 7.6pc and perhaps major contribution came from construction sector that is believed to be supporting about 40 allied industries.
The construction sector posted a reduction of 7.6pc compared to a target of 10pc increase. The mining and quarrying sector also showed a negative growth of 1.9pc against its growth target of 3.6pc.
Large-scale manufacturing provisional growth was estimated at negative 2pc against the target of 8.1pc while provisional growth in services sector was estimated at 4.7pc from 6.5pc target.
Published in Dawn, May 25th, 2019