ISLAMABAD: The country’s Gross Domestic Product (GDP) posted a modest growth of one percent during the 2nd quarter against the revised 2.50 percent in the 1st quarter of the current fiscal year 2023-24 and 2.20 percent in the 2nd quarter of the last fiscal year 2022-23.
The 108th meeting of the National Accounts Committee (NAC), to review the quarterly estimates of GDP for Q1 and Q2 for the years 2023-24, was held on Thursday which was chaired by the Ministry of Planning, Development and Special Initiatives (M/O PD&SI) secretary.
The 107th NAC meeting held in November 2023 approved the introduction of Quarterly National Accounts (QNA) in the statistical system of the country. The QNA provide the pulse of the economy at a shorter interval as compared to the Annual National Accounts (ANA).
Q2FY24: Pakistan sees GDP growth of 1%, below expectation
The committee approved the revised first quarter estimates of 2023-24. Overall GDP for Q1 for the financial year 2023-24 has witnessed a revised growth of 2.50 per cent as compared to the 2.13 per cent estimated in the 107th NAC meeting.
During Q2 2023-24, the economy posted a modest growth of 1.0 per cent. Agriculture has shown a growth of 5.02 per cent as compared to the same period of last year mainly due to healthy growth in important crops (8.12 per cent) because of significant growth in the final production of cotton, rice, and maize, first estimate of wheat (6.7 per cent increase in area) and cotton ginning (53.6 per cent). Livestock is at the same level while forestry and fishing have also retained their normal growth.
Industry in Q2, like Q1, has shown a negative growth (-0.84 per cent) as compared to Q2 last year. The mining and quarrying industry has witnessed negative growth of 4.17 per cent because of a decrease in the production of gas (-5.04 per cent), marble (-40.13 per cent), limestone (-20 per cent) etc and a decline in exploration cost.
Large-scale manufacturing, which is based on the Quantum Index of Manufacturing (QIM), has witnessed a positive growth of 0.35 per cent due to an increase in cooking oil, garments, fertilizers, etc. Electricity, gas, and water supply industry has shown a positive growth of 1.54 per cent because of an increase in the output of IPPs, hydro and nuclear plants. The construction industry declined to -17.59 per cent due to a decrease in the production of cement (-8.7 per cent) and iron and steel (-2.5 per cent) as well as a decline in general government expenditure.
The services industry has shown a nominal growth of 0.01 per cent in Q2 of 2023-24. Detailed analysis of the industry reflects a mixed trend. Wholesale and retail trade has witnessed a growth of 2.11 per cent because of positive growth in agriculture output and LSM.
The transport and storage industry has increased by 1.13 per cent because of the increase in output of railways and road transport. Due to high inflation, real growth in information and communication, finance and insurance and public administration and social security industries has become negative at 5.43 per cent, 11.1 per cent, and 16.18 per cent, respectively.
Public administration and social security which is commonly termed as General Government has declined by -16.18 per cent because of high deflator (CPI General increased by 29 per cent) as compared to the same period last year. The wholesale price index has also witnessed an increase of education has been estimated at -0.85 per cent in Q2 2023-24 as compared to the same period last year. The decline has been observed in an increase in deflator (CPI Education increased by 12 per cent). The human health and social work industry has declined by -2.53 per cent because of an increase in deflator (CPI Health services increased by 21 per cent). Other private services have been estimated at 3.63 per cent on the basis of indicators received from the sources.
Overall GDP for Q1 for the financial year 2023-24 has witnessed a revised growth of 2.50 per cent as compared to the 2.13 per cent estimated in the 107th NAC meeting.
Growth in agriculture has witnessed a healthy revision to 8.58 per cent from 5.06 per cent, mainly due to upward revisions in crops posting a double-digit growth of 17.66 per cent as compared to 6.13 per cent. The important crops, which were previously estimated based on area, has witnessed a phenomenal growth of 31.47 per cent because of a very low base in 2022-23 and a significant increase in production in final estimates of cotton (increased by 108.2 per cent to 10.22 million bales this year against 4.91 million bales last year), rice (increased by 34.8 per cent to 9.87 million tons vs. 7.32 million tons last year), and maize (5.6 per cent).
Despite improvement in mining and quarrying (from 2.15 per cent to 7.78 per cent), industry has witnessed a downward revision to -0.24 per cent as compared to growth of 2.48 per cent mainly due to downward revisions in LSM (from 0.68 per cent to -0.87 per cent in QIM), electricity, gas and water supply (from 0.08 per cent to -12.70 per cent) and construction (from 1.73 per cent to 0.74 per cent).
The services have posted a modest improvement from 0.82 per cent to 0.92 per cent due to finance and insurance (from -12.79 per cent to -2.88 per cent).
Copyright Business Recorder, 2024
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