ISLAMABAD: Pakistan’s gross domestic product (GDP) had contracted by 0.17 per cent rather than growing by 0.29pc during FY23 under the PDM-led coalition government while GDP growth in FY22 under the PTI regime was slightly higher than previously estimated.

This was officially confirmed on Tuesday by the National Accounts Committee (NAC) which also approved the first quarter (July-September 2023-24) GDP growth rate at 2.13pc. The government for the first time has released economic performance on a quarterly basis under a strict deadline of the International Monetary Fund (IMF).

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All three results — revised for FY22 and FY23 and Quarterly National Accounts (QNA) for Q1FY24 — are based on the 2015-16 base year.

The government was obligated under the structural benchmark of IMF’s Stand-By Arrangement (SBA) that “PBS will compile and disseminate the first-quarter estimates for 2023-24 and the revised annual estimates for 2022-23 by the end of November”. As such, the NAC concluded that the national economy witnessed recovery in Q1FY24 by posting a growth of 2.13pc as compared to 0.96pc in Q1FY23.

NAC revises up GDP growth in PTI’s last year to 6.17pc; issues quarterly numbers for the first time

The NAC also approved the final growth rate of GDP for 2021-22 at 6.17pc, slightly higher than previous estimates of 6.1pc approved in May this year. This was because of fractional improvement in agriculture sector growth from 4.27pc to 4.28pc, and relatively better results in both industrial and services sectors.

Industrial activities, according to final results, improved from 6.83pc to 6.95pc while services from 6.59pc to 6.66pc. As such, mining and quarrying (from -7pc to -6.58pc) and electricity, gas and water supply (from 3.14pc to 3.8pc) led to improved growth in industrial activities. The improvement in services is mainly due to Information and Communication (from 16.32pc to 17.96pc) and education from 5.66pc to 5.85pc.

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On the other hand, the revised GDP growth rate for 2022-23 was put at -0.17pc, which was provisionally estimated at 0.29pc in May. In the revised estimates, agriculture showed significant improvement from 1.55pc to 2.25pc.

Despite the reduction in the production of sugarcane (from 91.1 to 88 million tonnes), important crops output was revised upward from -3.20pc to 0.42pc due to an increase in production of wheat (from 27.6 to 28.2m tonnes) and maize (from 10.2 to 11m tonnes).

The other crops also declined from 0.23pc to -0.93pc due to a decline in production of green fodder (from 192.2 to 190m tonnes), fruits (-5.6pc) and oilseeds (-9.7pc). Forestry, on the other hand, improved in revised estimates from 3.93pc to 14.2pc due to higher production reported by Punjab.

However, in FY23, despite improvement in electricity, gas and water supply (from 6.03pc to 9.84pc), the industrial sector growth declined from negative 2.94pc to -3.76pc in the revised estimates due to decrease in Large-Scale Manufacturing (from -7.98pc to -9.87pc) and construction (from negative 5.53pc to -9.16pc).

The services sector growth in FY23 also declined from 0.86pc to 0.07pc due to transportation and storage (from 4.73pc to 3.27pc), information & communication (from 6.93pc to -2.55pc), finance & insurance (from -3.82pc to -8.09pc), public administration and social security ( from -7.76pc to -8.99pc), and education (from 10.44pc to 9.94pc). In the revised estimates, wholesale and retail trade slightly improved from -4.46pc to -4.01pc whereas human health and social work improved from 8.49pc to 10.57pc.

The NAC also approved the industry-wise methodology of compiling the quarterly GDP as well as a series of quarterly growth rates of GDP for various industries from the first quarter of 2016-17 to the first quarter 2023 by taking 2015-16 as the base year. This exercise was supported by local and international think tanks and multilateral institutions.

Talking about Q1FY24, the NAC estimated growth rate at 2.13pc as compared to the same period of FY23. This was supported by 5.06pc growth in agriculture, 2.48pc in industry and 0.82pc in services.

Published in Dawn, November 29th, 2023