Pakistan’s GDP Sees 1% Growth in Q2 of Financial Year 2023-24
Published on: March 30, 2024.
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National Accounts Committee Reviews GDP Estimates for 2023-24
The National Accounts Committee (NAC) recently held its 108th meeting, where it reviewed the quarterly estimates of Gross Domestic Product (GDP) for the first and second quarters of the fiscal year 2023-24. The committee also approved the revised first quarter estimates of 2023-24. The meeting, chaired by the Secretary Ministry of Planning Development and Special Initiatives, marked an important step in the introduction of Quarterly National Accounts (QNA) in Pakistan’s statistical system. QNA provide a more frequent snapshot of the economy compared to the Annual National Accounts (ANA).
Revised First Quarter GDP Growth
The revised first quarter estimates of 2023-24 show that the overall GDP for that period witnessed a growth of 2.50%, compared to the previously estimated 2.13% in the 107th NAC meeting. This positive growth can be attributed to a substantial upward revision in the agriculture sector, which grew by 8.58% instead of the earlier estimated 5.06%. The growth in crops, particularly important crops, saw a remarkable increase of 17.66% compared to 6.13% before. This significant growth in crops was primarily due to a very low base in the previous year.
Increase in Crop Production
The final estimates of cotton production increased by 108.2% to 10.22 million bales, while rice output rose by 34.8% to 9.87 million tons. Maize crop output also saw a modest growth of 5.6% during the first quarter. These increases in crop production have contributed to the overall growth in the agriculture sector.
Industry and Services Sectors
On the other hand, the mining and quarrying industry experienced improvement, growing from 2.15% to 7.78%. However, the industrial sector as a whole witnessed a downward revision to -0.24% from a growth of 2.48%. This decline can be attributed to various factors such as a decrease in large-scale manufacturing, electricity, gas, and water supply, and construction. Meanwhile, the services sector showed a modest improvement from 0.82% to 0.92%, mainly due to growth in the finance and insurance industry.
Second Quarter GDP Growth
In the second quarter of 2023-24, the economy saw a modest growth of 1.0%. The agriculture sector recorded a growth of 5.02%, primarily driven by an increase in production of important crops such as cotton, rice, and maize. The livestock, forestry, and fishing sectors also maintained their normal growth rates. The industrial sector, on the other hand, experienced a negative growth of -0.84%, with mining and quarrying witnessing a decline of 4.17%. Large scale manufacturing, based on the Quantum Index of Manufacturing (QIM), saw a positive growth of 0.35%.
Services Sector Analysis
The services sector posted a nominal growth of 0.01% during the second quarter of 2023-24. There was mixed performance within the industry, with wholesale and retail trade experiencing growth of 2.11% and transport and storage increasing by 1.13%. However, industries such as information & communication, finance & insurance, and public administration and social security saw negative growth due to factors such as high inflation. Education and human health and social work industries also posted negative growth.
The National Accounts Committee commended the National Accounts team of the Pakistan Bureau of Statistics, as well as key stakeholders including the Ministry of Planning Development and Special Initiatives, Ministry of Finance, and State Bank of Pakistan, for their efforts in preparing the quarterly GDP estimates.
