Pakistan’s GDP stands at 1% for Q2FY24, falls below expectations

ISLAMABAD: Pakistan’s economic growth for the second quarter (October-December) of fiscal year 2023-24 revealed a modest growth of 1%, according to estimates released by the Pakistan Bureau of Statistics (PBS) on Thursday. 

This announcement came following the 108th National Accounts Committee (NAC) meeting, where the PBS highlighted the economy’s performance during this period.

Contrary to official expectations, which had placed the GDP growth in the range of 2-3%, the actual figure fell short, marking a notable deviation. 

The Finance Ministry had previously anticipated a more robust expansion of around 3%, citing factors such as increased manufacturing output and higher crop production, particularly in cotton.

However, a closer examination of the sectors reveals a mixed performance. The agriculture sector exhibited growth of 5.02% compared to the same period last year, industries experienced a contraction of 0.84%. Services showed nominal growth of 0.01%.

The NAC also approved a revised figure for the first quarter, revising the growth rate to 2.5%, up from the previously estimated 2.13%. This upward revision primarily stemmed from improvements in agriculture, with a notable increase in crop production, particularly in cotton, rice, and maize.

Further analysis of sectoral performance in the second quarter revealed varying trends. Agriculture sustained its growth momentum, primarily driven by significant increases in the production of key crops. 

However, industries, including mining and quarrying, experienced negative growth due to declines in gas production and exploration costs. The construction industry also faced challenges, declining by -17.59% due to decreased production in cement and iron and steel.

Within the services sector, while wholesale and retail trade witnessed growth, other segments, such as Information & Communication and Finance & Insurance, saw negative growth rates, attributed partly to high inflation. Education and healthcare sectors also faced setbacks.

Despite these challenges, the National Accounts Committee acknowledged the efforts of key stakeholders, including the Ministry of Planning Development and Special Initiatives, the Ministry of Finance, and the State Bank of Pakistan, in compiling the quarterly GDP data.

As Pakistan maintains its growth forecast at 2-2.5% for the ongoing fiscal year, attention turns to policy measures aimed at addressing sector-specific challenges and fostering sustainable economic expansion.