ISLAMABAD: The National Accounts Committee (NAC) has approved growth rate of 0.92 percent for 1st quarter of fiscal year 2024-25 as compared to the same period of last fiscal year, and revised downward annual estimates to 2.50 percent as compared to earlier estimates of 2.52 percent for fiscal year 2023-24.
The NAC also approved methodology and quarterly estimates of expenditure side of the economy from 2015-16 Q1 to 2023-24 Q4.
The 111th meeting of the NAC was held under the chairmanship of Secretary, Ministry of Planning Development and Special Initiatives. The committee approved the updated annual growth rates for fiscal year 2022-23 and fiscal year 2023-24 (revised) and Q1 growth rate of GDP during fiscal year 2024-25.
The committee approved the updated growth of GDP during fiscal year 2023-24 at 2.50 per cent as compared to 2.52 per cent estimated previously. Despite improvement in important crops from17.02 per cent to 17.12 per cent the updated growth in agriculture has slightly moved down to 6.18 per cent from 6.36 per cent mainly due to downward revision in forestry from 3.05 per cent to -0.89 per cent mainly as result oflower production of timber.
The rate of contraction in industry moved up from 1.15 per cent to 1.65 per cent. The mining and quarrying industry witnessed major change from 3.47 per cent to -4.16 per cent due to decline in production of coal (-5.21 per cent) and limestone (-25.8 per cent) in Khyber Pakhtunkhwa and Balochistan provinces.
Improvement in transport (from 1.91 per cent to 2.12 per cent), information and communication(from 0.30 per cent to 3.45 per cent), education (from 8.55 per cent to 9.05 per cent) and health (from 5.55 per cent to 5.99 per cent) improved services from 2.15 per cent to 2.35 per cent.
The economy has posted a growth of 0.92 per cent during Q1 of fiscal year 2024-25. The growth in agriculture, industry and services stands at 1.15 per cent, -1.03 per cent and 1.43 per cent respectively.
During Q1, crops have contracted by 5.93 per cent. The contraction of 11.19 per cent in important crops is due to reduction in the production of cotton (-29.6 per cent), maize (-15.6 per cent), rice (-1.2 per cent), and sugarcane (-2.2 per cent).
The wheat crop has no impact in Q1 as it is neither sown nor harvested during this quarter. Other crops have grown by 2.08 per cent as compared to -2.08 per cent in Q1 last year due to decline in inputs e.g. fertilizer and pesticides. Livestock has increased by 4.89 per cent as compared to 4.56 per cent in Q1 last year because of increase in livestock products and decrease in inputs (dry fodder).
Forestry and Fishing industries have witnessed modest growth of 0.78 per cent and 0.82 per cent respectively.
The rate of contraction in industry has slowed down from 4.43 per cent in 2023-24Q1 to1.03 per cent in 2024-25Q1. Mining and quarrying industry has contracted by 6.49 per cent due to low quarterly production of mining products e.g. coal (-12.4 per cent), gas (-6.7 per cent) and crude oil (-19.8 per cent) provided by the sources. While, the Large Scale Manufacturing (LSM), driven by QIM, has declined by 0.82 per cent, the electricity, gas and water supply industry has posted a modest growth of 0.58 per cent.
The construction industry, estimated on the basis of production of construction inputs, has declined by 14.91 per cent mainly due to reduction in production of cement (-16.12 per cent) like key input.
The services have grown by 1.43 per cent as compared to 2.16 per cent in Q1 last year due to positive contribution in wholesale and retail trade (0.51 per cent), accommodation and food services (4.58 per cent),information and communication (5.09 per cent), real estate activities (4.22 per cent), education (2.03 per cent),human health and social work activities (5.60 per cent) and other private services (3.30 per cent). However, transportation and storage and public administration and social security industries have contracted by 0.07 per cent and 4.49 per cent respectively.
The committee also approved the introduction of quarterly estimates of expenditure side of the economy in addition to net taxes, GDP, net primary income, and gross national income (GNI) which were incorporated in the National Statistical System of Pakistan after the September 2024 meeting.
PBS consulted with key stakeholders including Ministry of Finance, M/O PD&SI, State Bank of Pakistan and Pakistan Institute of Development Economics (PIDE) on 24th December, 2024 to deliberate upon methodological choices for the quarterisation of the various components of the expenditure side of the GDP.
Based upon the inputs/comments of the stakeholders, the component-wise methodology to estimate the quarterly estimates of the GDP expenditures is presented as; Household final consumption expenditure (HFCE): In the annual estimates HFCE, which constitutes about80 per cent of the economy, is estimated through a residual approach as done in other regional economies e.g. India and Bangladesh. To align the QNA methodology with the ANA and to better capture seasonal-differences in the consumption patterns, estimation of quarterly HFCE has been proposed through the residual approach where all the remaining components of the expenditure side of the GDP have been estimated directly through source data/indicators/benchmarking.
NPISH final consumption expenditure: In the ANAs, NPISH FCE is extrapolated at current prices through the combined nominal output of membership organizations and NGOs’. Due to the non-availability of any relevant quarterly indicators, quarterly estimates of NPISH FCE have been derived through Denton (benchmarking) method.
General government final consumption expenditure: The estimates of General Government FCE are based on expenditures incurred by the federal, provincial, district and local governments including TMAs. The quarterly estimates of GG FCE have been derived by using the quarterly consolidated expenditures excluding interest payments reported in the quarterly reports on Fiscal Operations compiled by the Ministry of Finance.
Gross fixed capital formation: The compilation of GFCF is diverse by source i.e. private, public and general government as well as industries.
On the basis of latest figures of the national accounts aggregates for FY 2023-24, the overall size of the economy stands at Rs105.6 trillion, ie, US$ 373.3 billion. Further, per capita income in rupees is 472,263, ie, US$ 1,669. 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.
Copyright Business Recorder, 2024
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