Economy posts 2.4pc growth

OBAID ABRAR

ISLAMABAD: Pakistan’s economy recorded a 2.4 percent growth in the third quarter (January–March) of fiscal year 2024–25, as reported by the Pakistan Bureau of Statistics (PBS) on Tuesday.

Despite a 1.14 percent contraction in the industrial sector during the third quarter (January–March) of fiscal year 2024–25, Pakistan’s economy achieved a 2.4 per cent GDP growth, according to the PBS following the 113th National Accounts Committee (NAC) meeting.

This industrial decline was primarily due to negative growth in mining, quarrying, and large-scale manufacturing.

The updated growth rates in agriculture during Q1 is 0.84 per cent as compared to 0.74 per cent presented earlier. The upward revision in Q1 is due to improvement in other crops from 0.43 per cent to 5.53 per cent and forestry from -2.07 per cent to 0.79 per cent.

While there is improvement in other crops from 0.73 per cent to 5.52 per cent, forestry from -0.64 per cent to 3.18 per cent and fishing from 0.79 per cent to 1.63 per cent, important crops in Q2 have further moved down from -7.65 per cent to -12.09 per cent causing downward revision in agriculture from 1.10 per cent to 0.79 per cent.

Despite improvement in mining and quarrying from -8.06 per cent to -6.25 per cent, the industrial activities have posted downward revision from -0.66 per cent to -0.91 per cent due to decline in electricity, gas and water supply from +1.37 to -2.30 per cent in the updated estimates for Q1. The Q2 growth in industrial activities has witnessed downward revision from -0.18 per cent to -0.99 per cent mainly due to electricity, gas and water supply, which moved down to -3.40 per cent as compared to 7.71 per cent estimated earlier. The revised growth in services during Q1 and Q2 has slightly improved from 2.21 per cent and 2.57 per cent to 2.28 per cent and 2.59 per cent respectively due to improvement in wholesale and retail trade, transportation and storage, information and communication, and public administration and social security.

The economy has posted a stable growth of 2.40 per cent during Q3 of FY 2024-25. The growth in agriculture, industry and services stands at 1.18 per cent, -1.14 per cent and 3.99 per cent respectively. In agriculture, although important crops have declined by -11.14 per cent but other crops have grown by 4.84 per cent on account of double digit growth in production of onion (11 per cent) and mango (26 per cent).

Livestock (4.42 per cent), forestry (4.25 per cent) and fishing (0.50 per cent) have also registered positive growth rates during Q3 FY 202425. The negative growth rate in industry (-1.14 per cent) is due to mining and quarrying (-3.96 per cent), large-scale manufacturing (-0.89 per cent), electricity, gas and water supply (-7.72 per cent) and construction (-9.12 per cent).

The overall growth in services is 3.99 per cent during Q3 2024-25 with all the constituents contributing positively i.e. wholesale and retail trade (+1.57 per cent), transportation and storage (+0.67 per cent), information and communication (+18.44 per cent), finance and insurance activities (+10.65 per cent), public administration and social security (+13.73 per cent) education (+4.63 per cent), health and social work (5.06 per cent) and other private services (+2.93 per cent).

The committee approved the overall final growth of annual GDP during FY 2022-23 at -0.21 per cent, which was estimated at -0.22 per cent in the 111th meeting.

The final growth rates in agriculture, industry and services during FY 2022-23 are 2.24 per cent, -3.88 per cent and 0.04 per cent respectively.

Further, the revised growth during FY 2023-24 is 2.51 per cent, which was estimated at 2.50 per cent in the previous meeting.

In the revised estimates, agriculture has improved from 6.18 per cent to 6.40 per cent, the industry has improved from -1.65 per cent to -1.37 per cent, whereas, services have slightly declined from 2.35 per cent to 2.19 per cent due to downward revision in transportation and storage (from 2.12 per cent to 1.51 per cent) and human health and social work activities (from 5.99 per cent to 3.34 per cent).

The committee also approved the provisional growth of GDP at 2.68 per cent during on-going FY 2024-25. The provisional growth rates in agriculture, industry and services are 0.56 per cent, 4.77 per cent and 2.91 per cent respectively. In agriculture, important crops have declined by 13.49 per cent due to decrease in production of wheat (-8.91 per cent from 31.81 to 28.98 MT), maize (-15.4 per cent from 9.74 to 8.24 million tons), rice (-1.38 per cent from 9.86 to 9.72 million Tons), sugarcane (-3.88 per cent from 87.64 to 84.24 million tons) and cotton (-30.7 per cent from 10.22 to 7.08 million bales).

Despite reduction in the production of grams (-16.6 per cent), other crops have posted a provisional growth of 4.78 per cent due to double-digit growth in the production of potato (11.5 per cent from 8.43 to 9.40 million tons), onion (15.9 per cent from 2.30 to 2.67 million tons), mango (26.7 per cent from 2.09 to 2.65 million tons), and sesame (44.7 per cent from 0.30 to 0.44 million tons). While cotton ginning and miscellaneous component has declined by 19.03 per cent, livestock, forestry and fishing have posted provisional growth rates of 4.72 per cent, 3.03 per cent and 1.42 per cent respectively. Industry in 2024-25, has shown a growth of 4.77 per cent provisionally.

Despite increase in the production of coal (2.84 per cent), mining and quarrying industry has contracted by 3.38 per cent because of decrease in production of natural gas (-7.05 per cent), crude oil (-14.72 per cent) and other minerals.

Large scale manufacturing, which is based on Quantum Index of Manufacturing (QIM) (July-March), has witnessed a negative growth of 1.53 per cent with mixed trend in the production of various groups e.g. food (-0.49 per cent), beverages (+0.88 per cent), tobacco (+13.12 per cent), textile (+2.15 per cent), wearing apparel (+7.62 per cent), coke and petroleum (+4.48 per cent), chemicals (-5.51 per cent), non-metallic mineral products (-10.45 per cent), iron and steel products (-10.94 per cent), fabricated metal (-17.16 per cent), electrical equipment (-15.89 per cent) and automobiles (+40.0 per cent).

Electricity, gas and water supply industry has shown a positive growth of 28.88 per cent primarily due to low base effect of FY 2023-24 i.e. -19.86 per cent as well increase in output of WAPDA and companies. Construction industry increased by 6.61 per cent due to increase in construction-related expenditures by the private sector and general government.

Services industry has also shown a growth of 2.91 per cent in 2024-25 with positive contributions from all the constituents. Wholesale and retail trade has witnessed a modest growth of 0.14 per cent because of slower output growth in agriculture and manufacturing. Transport and storage industry has increased by 2.20 per cent because of increase in output of water, air and road transport. Information and communication has grown by 6.48 per cent due to increase in output of computer programming and consultancy activities (24 per cent). Slower rate of inflation and low base effect has resulted into positive growth rates in finance and insurance and public administration and social security industries at 3.22 per cent and 9.92 per cent respectively.

Further, both education and human health and social work industries have posted positive growth of 4.43 per cent and 3.71 per cent respectively.

Other private services have been estimated at 3.64 per cent on the basis of indicators received from the sources.

On the basis of latest figures of the national accounts aggregates for FY 2024-25, the overall size of the economy stands at Rs114.7 trillion i.e. US$ 410.96 billion as compared to Rs105.1 trillion i.e. US$ 371.66 billion.

Further, per capita income in rupees is 509,174 i.e. US$ 1,824. However, the series of per capita income from 2016-17 onwards will be revised after the receipt of backward and forward projections of population from the sources on the basis of 2023- population census.