Pakistan's Economic Rebound: GDP Growth Surges to 2.13% in 1QFY24

In a positive turn of events for Pakistan's economy, the Gross Domestic Product (GDP) growth rate rebounded to 2.13% in the first quarter of the fiscal year 2023-24 (1QFY24), marking a significant improvement from 0.96% in the same period last year. These estimates, disclosed by the Pakistan Bureau of Statistics (PBS), gained approval in the 107th National Accounts Committee (NAC) meeting on Tuesday.

To align with the structural benchmark set under the IMF-SBA program, the PBS engaged with stakeholders and data providers to present revised GDP figures for FY23 and 1QFY24 during the NAC meeting. Additionally, the NAC sanctioned the incorporation of quarterly national accounts into the country's statistical system.

Revised GDP Figures

Revisiting the figures for FY23, the revised GDP growth rate now stands at -0.17%, a departure from the provisional report of 0.29%.

Industry-wise Breakdown

The 107th NAC also greenlit the industry-wise methodology for compiling Quarterly GDP and the series of quarterly growth rates for various industries from Q1 2016-17 to Q1 2023, with the base year being 2015-16.

1QFY24 Sectoral Growth:

- Agriculture: 5.06%

- Industry: 2.48%

- Services: 0.82%

Agriculture's Noteworthy Growth

In agriculture, a robust growth of 6.13% was observed, driven by an 11.16% increase in important crops. Notable drivers included a 21% rise in the sowing area for rice, 11% for cotton, and 5% for maize. Sugarcane, although showing an 11% decline, was offset by growth in other major crops.

Industrial Upswing

After facing a continuous decline in three quarters of FY23, the industry reversed its trajectory in 1QFY24, posting a growth of 2.48%. Key highlights include positive growth in mining and quarrying (2.15%), manufacturing (0.93%), and a 15.38% surge in cement production.

Services Sector Overview

The services sector recorded an overall growth of 0.82%. Wholesale and Retail Trade saw a notable uptick at 3.05%, driven by positive growth in agriculture and industry. Transportation grew by 1.7%, and Information & Communication turned around with a 2.4% growth. However, Finance and Insurance reported a decline of -12.79%, primarily due to a decrease in output from insurance and exchange brokers.

Public administration reported a -16.65% decline in the quarter, influenced by a high deflator, contributing to a decline in constant prices. Negative growth in education and human health & social work activities was largely attributed to a decrease in government budget data along with a high deflator.