Pakistan’s economy grows 2.13% in 1st quarter of FY24: NAC

Pakistan’s gross domestic product (GDP) grew 2.13% in the first quarter of the financial year 2023-24 as compared to 0.96% in the same period of the previous year, estimates released by the Pakistan Bureau of Statistics (PBS) on Tuesday showed.

The National Accounts Committee (NAC) approved the estimates in its 107th meeting held to to review the annual estimates of GDP for the years 2021-22 (final), 2022-23 (revised) and quarterly estimates from Q1 2016-17 to Q1 2023-24.

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During the meeting, the NAC approved introduction of Quarterly National Accounts (QNA) in the statistical system of the country.

“To meet the structural benchmark under the IMF-SBA program, PBS held meetings with stakeholders and data providers and presented the revised GDP numbers for 2022-23 and Q1 2023-24 before the NAC on 28th November 2023,” the post-meeting press release stated.

The revised growth rate of GDP for the year 2022-23 was estimated at -0.17%, which was provisionally estimated at 0.29%. In the revised estimates, agriculture significantly improved from 1.55% to 2.25%, it added.

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First quarter of FY24

In the first quarter of FY24, agriculture showed a growth of 5.06%, industry 2.48%, and services 0.82%.

In agriculture, crops posted healthy growth of 6.13%, including 11.16% growth in important crops.

“The major driver for growth in important crops is the increase in sowing area in comparison with the last year. For instance, the sowing area for rice, cotton and maize increased by 21%, 11%, and 5%, respectively. It declined by 11% for sugarcane, which is offset by the other three major crops,” the statement added.

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Industry, after witnessing a continuous decline in three quarters in 2022-23 except a modest growth in Q2, changed its direction in Q1 2023-24 by posting a growth of 2.48%.

Mining and quarrying industry showed positive growth of 2.15% on the basis of quarterly production of mining sector.

Large scale manufacturing (LSM) growth is on the basis of Quantum Index of manufacturing (QIM) which showed a growth of 0.93% in Q1 2023-24.

A growth of 0.08% was reported in electricity generation and distribution, gas distribution and water supply. Meanwhile, construction industry growth was estimated at 1.73% on the basis of output of construction indicators.

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Production of cement increased by 15.38% during Q1 of 2023-24 as compared to the same quarter last year. However, iron and steel observed negative growth of 2.20% during Q1 2023-24.

The service sector witnessed an overall growth of 0.82% in the said quarter.

Wholesale and retail trade, which is based on output of agriculture, manufacturing and imports was estimated at 3.05% because of positive growth in agriculture and industry.

Transport showed a growth of 1.7% which is based on the quarterly data reported by the sources. Information and communication, which remained negative in most of the quarters last year changed its direction by posting 2.4% growth, mainly because of low base and quarterly information received from the sources, the NAC press release said.

Finance and insurance industry posted a negative growth of 12.79% because of decline in output of insurance companies, exchange brokers, mercantile brokers and also high growth in deflator, it added.

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Public administration (which is based on the budget documents of federal, provincial, district and cantonments/local government) reported a negative growth of 16.65% in Q1 2023-24.

Further, high deflator also resulted in decline in constant prices.

“Negative growth in both education and human health and social work activities are mostly driven by the decline in government budget data along with high deflator,” the statement read.

“The GDP estimates have been released to meet IMF structural benchmark under tight deadline and are based on available information and data. However, as a matter of practice and due to the time-lag involved in the finalisation of data for the last two fiscal years, the annual GDP estimates are subject to revision in the NAC meeting to be held in May 2024,” it said.