NAC approves revised GDP estimates for FY2023-24

May 23, 2024

Qudsia Bano

The National Accounts Committee (NAC) has approved significant revisions to the country's economic indicators, reports WealthPK. The 109th meeting, chaired by the Secretary of Planning Development & Special Initiatives (PD&SI), focused on the quarterly GDP growth rates for FY2023-24 and the annual growth rates for FY2021-22, FY2022-23, and FY2023-24. The committee approved the revised GDP growth rates for the first and second quarters of FY2023-24, now at 2.71% and 1.79%, respectively. These figures represent an increase from the previously estimated 2.5% and 1.0% reported at the 108th NAC meeting. The revised GDP estimates and sectoral growth projections, approved by the NAC, signal a positive path ahead for Pakistan's economy, reflecting resilience and potential for recovery. In the industrial sector, despite substantial improvement in mining and quarrying from 7.78% to 15.46% in Q1, the overall industrial activities saw a downward revision from -0.24% to -2.44% due to a significant decline in electricity, gas, and water supply.

Conversely, Q2 industrial growth witnessed an upward revision from -0.84% to 0.09%, bolstered by positive changes in mining, quarrying, and construction activities. The improvements in industrial growth, particularly in mining and quarrying, indicate a resurgence in resource extraction and associated industries. The services sector experienced upward revisions, with Q1 growth increasing from 0.92% to 2.02% and Q2 from 0.01% to 0.75%. These improvements were attributed to gains in information and communication, public administration, education, and health and social work activities. The committee also confirmed the final GDP growth for FY2021-22 at 6.18%, a slight increase from the previous estimate of 6.17%. Sector-wise growth rates for this period were finalized at 4.21% for agriculture, 7.01% for industry, and 6.69% for services. For FY 2022-23, the revised GDP growth was adjusted to -0.21%, slightly lower than the earlier estimate of -0.17%. In these revised estimates, industry remained relatively stable at -3.74%, and services saw a minor decline from 0.07% to -0.01%. Looking ahead, the provisional GDP growth for FY 2023-24 is projected at 2.38%.

The industrial sector is projected to grow by 1.21%, with mining and quarrying showing a significant increase due to higher production in crude oil, coal, and other minerals. Large-scale manufacturing is expected to grow marginally, while the electricity, gas, and water supply sectors may decline by 10.55%. The construction industry is forecast to rise by 5.86%. The services sector is also anticipated to grow by 1.21%, with varying performances across sub-sectors. Wholesale and retail trade are expected to grow by 0.32%, while transport and storage may increase by 1.19%. However, high inflation has led to negative real growth in information and communication, finance and insurance, and public administration. On a positive note, the education, human health, and social work sectors are projected to grow significantly. Despite some challenges in electricity, gas, and water supply, these developments define the diversified nature of the economy and provide a foundation for sustained growth, increased employment, and improved living standards.

Credit: INP-WealthPk