ISLAMABAD: The National Accounts Committee (NAC) has revised the GDP growth rate downward for the fiscal year 2022-23 to -0.17 percent, which was provisionally estimated at 0.29 percent.

The committee chaired by the secretary Ministry of Planning, Development and Special Initiatives also approved the introduction of Quarterly National Accounts in the statistical system of the country.

The GDP estimates have been released to meet the IMF structural benchmark under a tight deadline and are based on available information and data.

NAC approves ‘0.29pc’ provisional growth rate

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.

The 107th meeting of NAC 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 was held here on Tuesday.

In the 106th meeting of the NAC held in May 2023, the provisional GDP estimates for the year 2022-23 and revised GDP estimates for the year 2021-22 were presented, which are updated on the basis of the latest available data.

The final growth rate of GDP for the year 2021-22 has been estimated at 6.17 per cent, which was 6.10 per cent in the revised estimates.

The growth in the agriculture sector has remained stable with fractional improvement from 4.27 per cent to 4.28 per cent, whereas, it has improved for industrial activities from 6.83 per cent to 6.95 per cent and services from 6.59 per cent to 6.66 per cent.

As such, Mining and Quarrying (from -7.0 per cent to -6.58 per cent) and electricity, gas and water supply (from 3.14 per cent to 3.80 per cent) have led to improved growth in industrial activities.

The improvement in services is mainly due to information and communication (from 16.32 per cent to 17.96 per cent) and education from 5.66 per cent to 5.85 per cent.

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

Despite a reduction in the production of sugarcane (from 91.1 to 88.0 M. Tons), important crops have been revised upward from -3.20 per cent to 0.42 per cent due to an increase in the production of wheat (from 27.6 to 28.2 M. Tons) and maize (from 10.2 to 11.0 M. Tons).

The other crops have declined from 0.23 per cent to -0.93 per cent due to a decline in production of green fodder (from 192.2 to 190.0 M. Tons), fruits (-5.6 per cent) and oilseeds (-9.7 per cent). Forestry has improved in revised estimates from 3.93 per cent to 14.2 per cent due to higher production reported by Punjab province.

Despite improvement in electricity, gas and water supply (from 6.03 per cent to 9.84 per cent), the industrial sector growth has declined from -2.94 per cent to -3.76 per cent in the revised estimates due to decrease in LSM (from -7.98 per cent to -9.87 per cent) and construction (from -5.53 per cent to -9.16 per cent). The services sector growth has also declined from 0.86 per cent to 0.07 per cent due to transportation and storage (from 4.73 per cent to 3.27 per cent), information and communication (from 6.93 per cent to -2.55 per cent), finance and insurance (from -3.82 per cent to -8.09 per cent), public administration and social security (from -7.76 per cent to -8.99 per cent), and education (from 10.44 per cent to 9.94 per cent). In the revised estimates, wholesale and retail trade slightly improved from -4.46 per cent to -4.01 per cent, whereas, human health and social work improved from 8.49 per cent to 10.57 per cent. As an extraordinary step in the history of macroeconomic statistics of Pakistan, the 107th NAC reviewed, examined and approved the industry-wise methodology of compiling the Quarterly GDP as well as series of quarterly growth rates of GDP for various industries from Q1 2016-17 to Q1 2023 by taking 2015-16 as base year. The PBS initiated the work on Quarterly National Accounts (QNA) soon after the approval of new base of national accounts adopted in January 2022. PBS held discussions with the World Bank for technical assistance on QNA and online technical meetings started on 22nd June 2022 with the World Bank expert which continued till June 2023. Moreover, a technical committee of national experts reviewed the methodology, sources and results during July-August 2023.

The experts include members from the Ministry of Finance, Ministry of Planning, Development and Special Initiatives, the State Bank of Pakistan, Pakistan Institute of Development Economics (PIDE), Quaid-i-Azam University, and independent industry.

Later on, the IMF included the QNA compilation in its structural benchmark of the Stand-By Arrangement (SBA) Program which stated that “PBS will compile and disseminate the First Quarter estimates for 2023-24 and the revised annual estimates for the financial year 2022-23 by end of November 2023”.

Copyright Business Recorder, 2023