ISLAMABAD: Pakistan’s economic growth of 2.52 per cent for 2023–24 missed the projected target of 3.5pc, primarily due to a slump in industrial production, according to the data released by the Pakistan Bureau of Statistics (PBS) on Monday.

The moderate growth was achie­ved thanks to higher agricultural incomes and worker remittances.

The National Accounts Committee (NAC) convened its 110th meeting on Mon­day and approved the revised quarterly GDP growth rates for Q1, Q2, Q3, and new estimates for Q4 in FY24, as well as upd­ated annual growth rates for FY23 and FY24.

The Asian Development Bank, in its outlook, also announced a 2.4pc growth for FY24. The bank also forecasts a 2.8pc growth for FY25.

Growth target missed due to slump in industrial production

The NAC meeting approved the revised quarterly growth rates for Q1, Q2, and Q3 of FY24, which increased to 2.69pc, 1.97pc, and 2.36pc from 2.71pc, 1.79pc, and 2.09pc at the previous meeting owing to annual benchmark changes.

GDP grew by 3.07pc in the fourth quarter of FY24. The updated provisional and revised growth rates for FY24 and FY23 are 2.52pc and -0.22pc, respectively, compared to the previous NAC meeting’s approvals of 2.38pc and -0.21pc.

The committee approved the upda­ted provisional GDP growth at 2.52pc during FY24 based on improved data from the sources compared to 2.38pc estimated in the previous meeting. The revised growth rates in agriculture, industry and services are 6.36pc, -1.15pc and 2.15pc, respectively.

Agriculture’s healthy increase is mostly owing to double-digit growth in important crops, i.e. 17.02pc, up from 16.82pc at the previous meeting due to improved wheat production (from 31.438 to 31.583 million tonnes). While other crops’ growth has fallen from 0.90pc to -1.20pc, livestock growth has increased from 3.89pc to 4.47pc due to lower inputs. Cotton ginning also increased by 47.23pc compared to a 22.84pc decrease the previous year.

In FY24, industrial output contracted by 1.15pc compared to 1.21pc, as indicated at the previous meeting. Mining and quarrying had been revised downward from 4.85pc to 3.47pc due to a decline in gas (-2.22pc) and coal (-2.10pc). Large-scale manufacturing, as measured by the Quantum Index of Manufacturing (QIM), rose to 0.91pc (July-June QIM) from 0.07pc (July-March QIM) owing to increases in food (from 1.69pc to 1.73pc), wearing clothes (from 5.41pc to 8.24pc), and coke and petroleum (from 4.85pc to 9.81pc).

The fall in the electricity, gas and water supply business has accelerated to 23.05pc against 10.55pc due to a reduced output by Wapda, K-Electric and SNGPL. The construction industry shrank 1.47pc in the updated estimates, down from 5.86pc in the previous meeting, owing to increased construction-related expenditures in the public sector.

The new growth rate for services is 2.15pc compared to 1.21pc in prior projections. There are significant positive developments in wholesale and retail trade (3.39pc vs 0.32pc due to increase in LSM and imports), transport and storage (1.91pc vs 1.19pc due to railroads, Karachi Port Trust, PIA, and Civil Aviation Authority), and information and communication (0.30pc vs -3.02pc due to IT exports).

However, development in several areas has slowed, including banking and insurance (-10.67pc versus 9.64pc), public administration and social security (-7.26pc vs -5.25pc), education (8.55pc vs 10.30pc), and human health and social work (5.55pc and 6.80pc). Other private services were constant at 3.61pc compared to 3.58pc in earlier estimates.

Published in Dawn, October 1st, 2024