LAHORE, April 16: The Punjab’s overall GDP is likely to grow by 7.5-8 per cent this financial year as compared to 4.7 per cent in 2002-03, says a senior official.

“Should Pakistan’s GDP grow by 6.5-7 per cent this year (as is being expected by the federal government), the provincial GDP has to grow by 7.5-8 per cent,” Punjab Planning and Development Board Chairman Salman Ghani told a questioner at a news conference held on Saturday to brief reporters about the 2nd Punjab Development Forum (PDF) beginning on Monday.

The Punjab’s GDP grew by an average 4.5 per cent between 1991-2003 as compared to national average of 4.1 per cent, according to the Punjab Economic Report prepared by the provincial government. The GDP of the three smaller provinces grew by an average rate of 3.7 per cent. The report estimates that the provincial GDP had grown by a hefty 9.2 per cent in 1991-92.

The report, a joint effort of the provincial government, World Bank, Asian Development Bank, and the UK Department for International Development, is being formally launched at the PDF.

Since no official estimate of the provincial GDP exists, says the report, the World Bank has evolved a rough series of the provincial GDP as an interim measure following the national estimation methodology wherever data are available in disaggregate form.

“Since information is not available for all sub-sectors, regional allocators have been applied in these instances to estimate the provincial economy’s contribution to the gross national output,” says the report, emphasizing the approximate nature of calculations and stressing that they should be used as broad indication of trends rather than as precise estimates for a given year.

With the average contribution of agriculture in the provincial GDP between 1991-03 is estimated at 3.6 per cent, and of industry at 4.5 per cent, the services sector grew by five per cent during the same period.

Agriculture constitutes 27 per cent of the provincial economy, industry 22.5 per cent, and services 50.5 per cent. “The services sector, constituting over half the aggregate GDP of the province, has been the fastest growing sector of the economy —- it grew roughly at an average rate of five per cent per annum —- during 1990s,” the report says.

“With the total population of about 74 million, well over half of the national population, and an estimated provincial GDP that accounts for 57 per cent of Pakistan, the factors that affect the economy of the Punjab have a bearing on the country as a whole,” says the report.

“Given that population growth in the Punjab was in the neighbourhood of 2.4 per cent a year, the per capita income in the province increased annually at about 2.1 per cent during this period,” says the report. However, it admits that for many individuals the increase would have been less than the average, and since the average rate was so low many must have suffered a negative rate of growth and become increasingly poorer. This low growth rate of per capita income for an extended period is said to be the root cause of the increase in the incidence of poverty in the province.