Pakistan’s GDP grows 2.5% in FY24, but misses target due to industrial slump

Pakistan’s economy grew by 2.52% during the fiscal year 2023-24, falling short of the projected 3.5% target due to a decline in industrial output, as per data released by the Pakistan Bureau of Statistics (PBS). 

The National Accounts Committee (NAC) approved the revised figures during its 110th meeting, reflecting quarterly GDP revisions and adjustments for FY23 and FY24.

The economic performance in FY24 was supported by gains in the agricultural sector and remittances from workers, but a contraction in the industrial sector dragged overall growth. 

Agriculture achieved growth of 6.36%, driven by a 17.02% rise in major crops, particularly wheat, which increased from 31.438 million to 31.583 million tonnes. However, other crops witnessed a decline, while livestock growth improved due to lower input costs. Cotton ginning showed remarkable recovery, growing by 47.23% compared to the previous year’s 22.84% contraction.

On the other hand, industrial production shrank by 1.15%, reflecting continued challenges in sectors like mining, quarrying, and electricity, gas, and water supply. 

The fall in electricity, gas, and water supply accelerated to 23.05% due to reduced output from Wapda, K-Electric, and SNGPL. Meanwhile, large-scale manufacturing improved slightly to 0.91%, driven by higher output in food, apparel, and petroleum products.

The services sector grew by 2.15%, boosted by improvements in wholesale and retail trade, transportation, and communication. Positive developments in these industries offset declines in finance, insurance, public administration, and education.

The NAC also updated the quarterly GDP growth rates for FY24, with Q1 revised to 2.69%, Q2 to 1.97%, Q3 to 2.36%, and Q4 registering 3.07% growth. The committee also approved updated growth rates for FY23, which were revised to -0.22%, slightly lower than the previously approved -0.21%.

In its revised outlook, the Asian Development Bank projected a growth rate of 2.4% for FY24, with an anticipated improvement to 2.8% in FY25.

The NAC emphasized that the updated growth rates reflect changes in annual benchmarks across sectors. The industrial sector’s underperformance, particularly in mining and utilities, continued to weigh on the economy. However, improvements in agriculture and certain service industries provided much-needed support to overall GDP growth.