3.94pc of GDP growth estimated during current fiscal year

ISLAMABAD: The National Accounts Committee has estimated 3.94 percent of Gross Domestic Product (GDP) during the current fiscal year (2020-21), higher than 1.64 percent from the projected 2.3 percent in the Budget 2020-21.

The 103rd meeting of the National Accounts Committee to review the GDP was held under the chairmanship of the secretary Ministry of Planning, Development and Special Initiatives. The provisional estimates of the GDP and Gross Fixed Capital Formation (GFCF) for the year 2020-21 were presented on the basis of the latest data of 6-9 months, which were annualised.

The provisional growth of GDP for the year 2020-21 has been estimated at 3.94 percent, which is based upon growth estimates of the agricultural, industrial, and services sectors at 2.77 percent, 3.57 percent, and 4.43 percent, respectively.

The growth for 2019-20 was revised downward from -0.38 percent to -0.47 percent.

The sector-wise brief is given below.

Agricultural Sector: The agriculture sector grew by 2.77 percent in 2020-21 as against 3.31 percent in 2019-20. The growth of important crops during this year is 4.65 percent on the back of the historic highest ever production of wheat, rice, and maize while sugarcane registered the second-highest ever production.

This growth in the production of wheat, rice, sugarcane, and maize is at 8.1 percent, 13.6 percent, 22.0 percent, and 7.38 percent, respectively. However, cotton has witnessed negative growth of 22.8 percent, which also resulted in a 15.6 percent decline in cotton ginning.

Other crops (vegetables, fruits and green fodder, etc) showed positive growth of 1.41 percent mainly because of an increase in the production of oilseeds and vegetables. The livestock sector registered a growth of 3.1 percent. Forestry has grown at 1.4 percent. Industrial Sector: The overall industrial sector has witnessed a positive growth of 3.57 percent. The value-added in the mining and quarrying sector has declined by 6.5 percent. The large-scale manufacturing (LSM) sector, which is driven primarily by Quantum Index of Large Scale Manufacturing Industries (QIM) data (from July 2020 to March 2021), showed an unprecedented healthy growth of 9.29 percent.

Major contributors to this growth are textile (5.9 percent), food beverage and tobacco (11.73 percent), petroleum products (12.71 percent), pharmaceuticals (12.57 percent), chemicals (11.65 percent), non-metallic mineral products (24.31 percent), automobiles (23.38 percent), and fertilizer (5.69 percent).

The electricity and gas sub-sector has declined by 22.96 percent mainly due to lower allocation of subsidies by the government to DISCOs, low increase in output, and a higher proportional increase in intermediate consumption.

The construction activity has increased by 8.34 percent mainly due to an increase in general government expenditure and private sector construction-related expenditures.

The Small Scale Manufacturing Industries, showed 8.31 percent growth.

Services Sector: Services sector remained a major growth driver for many years and this year, it witnessed a growth of 4.43 percent in the provisional estimates.

While the wholesale and retail trade sector grew by 8.37 percent primarily because of an increase in the marketable surplus, the transport, storage, and communication sector has declined by 0.61 percent. The finance and insurance sector showed an increase of 7.84 percent. The remaining components of services i.e. housing, general government and other private services have witnessed a positive growth of 4.01 percent, 2.20 percent, and 4.64 percent, respectively.

GDP at Current Market Prices: GDP at current market prices has also been computed and stands at Rs47,709 billion for 2020-21. This shows a growth of 14.8 percent over Rs41,556 billion for 2019-20.

The per capita income for 2020-21 has been calculated as Rs246,414, showing a growth of 14.6 percent over Rs215,060 during 2019-20.

The per capita income in dollars increased by 13.4 percent from USD 1,361 in 2019-20 to USD 1,543 in 2020-21.

Copyright Business Recorder, 2021