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ISLAMABAD: The National Accounts Committee (NAC) has approved provisional growth of gross domestic product (GDP) at 2.38 per cent for the ongoing fiscal year 2023-24 against the budgetary projection of 3.5 per cent.

The approval was given by the 109th meeting of the NAC presided over by the Planning, Development and Special Initiatives secretary on Tuesday.

The committee approved the quarterly revised GDP growth of first and second quarters and third quarter during fiscal year 2023-24 as well as annual growth rates for 2021-22 (final), and 2022-23 (revised) and 2023-24 (provisional).

FY24 real GDP projected to grow by 1.9pc

The overall GDP for quarter one and two of 2023-24 fiscal year was revised 2.71 per cent and 1.79 per cent as compared to 2.50 per cent and one per cent estimated in the previous meeting (108) of the NAC.

The committee approved the provisional growth of GDP at 2.38 per cent during the ongoing fiscal year 2023-24. The provisional growth in agriculture is projected at 6.25 per cent and 1.21 per cent for both industry, as well as, services sectors.

The healthy growth of agriculture is mainly due to double-digit growth in important crops; i.e., 16.82 per cent on the back of bumper crops of wheat (11.64 per cent from 28.16 to 31.44 MT), cotton (108.22 per cent from 4.91 to 10.22 million bales) and rice (34.78 per cent from 7.32 to 9.87 million tons). Two important crops; i.e., sugarcane (-0.39 per cent from 87.98 to 87.64 million tons) and maize (-10.35 per cent from 10.99 to 9.85 million tons) have posted negative growth.

Further, provisional growth in other crops is 0.90 per cent, cotton ginning and miscellaneous component 47.23 per cent, livestock 3.89 per cent and forestry 3.05 per cent.

The revised growth in agriculture during quarter-1 has remained stable at 8.59 per cent against 8.58 per cent presented earlier, the growth in quarter-2 has improved from 5.02 per cent to 5.83 per cent mainly due to upward revisions in important crops (from 8.12 per cent to 12.92 per cent) and other crops (from -0.31 per cent to 0.65 per cent).

Despite significant improvement in mining and quarrying from 7.78 per cent to 15.46 per cent, the industrial activities have posted downward revision from -0.24 per cent to -2.44 per cent due to a decline in electricity, gas and water supply from -12.70 to -27.62 per cent in the revised estimates for quarter-1.

However, quarter-2 growth in industrial activities has witnessed upward revision from -0.84 per cent to 0.09 per cent on account of positive changes in mining and quarrying (from -4.17 per cent to 4.39 per cent) and construction (from -17.59 per cent to -10.85 per cent) despite downward revisions in large-scale manufacturing (from0.48 per cent to -0.83 per cent) and electricity, gas and water supply (from 1.54 per cent to -0.28 per cent).

The revised growth in services during quarter-1 and quarter-2 has improved from 0.92 per cent and 0.01 per cent to 2.02 per cent and 0.75 per cent respectively due to improvement in information and communication, public administration and social security, education and human health and social work activities.

The economy has posted a stable growth of 2.09 per cent during quarter-3 of fiscal year 2023-24. The growth in agriculture, industry and services stands at 3.94 per cent, 3.84 per cent and 0.83 per cent, respectively.

During quarter-3, all the constituents of agriculture have contributed positively; e.g., important crops (2.89 per cent due to wheat), other crops (1.14 per cent), cotton ginning (61.75 per cent) and livestock (4.20 per cent).

Despite negative growth of construction industry (-15.75 per cent), the industrial growth of 3.84 per cent is attributable to mining and quarrying (0.63), large-scale manufacturing (1.47 per cent), and electricity, gas and water supply (37.3 per cent).

The overall growth in services is positive (0.83 per cent) during quarter-3 2023-24albeit having mixed trend in its constituents i.e. wholesale and retail trade (0.38 per cent), transport and storage (0.91 per cent),information and communication (-5.92 per cent), finance and insurance activities (-7.11 per cent), public administration and social security (-6.38 per cent), and education (10.38 per cent).

The committee approved the overall final growth of annual GDP during the financial year 2021-22 at 6.18 per cent, which was estimated at 6.17 per cent in the 107th meeting. The final growth rates in agriculture, industry and services during the financial year 2021-22 are 4.21 per cent, 7.01 per cent and 6.69 per cent respectively.

Further, the revised growth during the financial year 2022-23 is -0.21 per cent, which was estimated at -0.17 per cent in the previous meeting. In the revised estimates, agriculture has improved from 2.25 per cent to 2.27 per cent, the industry has remained stable; i.e., -3.74 per cent vs. -3.76 per cent, whereas, as services have slightly declined from 0.07 per cent to -0.01 per cent due to downward revision in education (from 9.94 per cent to 5.15 per cent) and human health and social work activities (10.57 per cent to 8.87 per cent). Industry in 2023-24, has shown a growth of 1.21 per cent provisionally. The mining and quarrying industry has witnessed a growth of 4.85 per cent because of an increase in the production of crude oil (1.51 per cent), coal (37.72 per cent), other minerals (7.57 per cent); e.g., limestone (7.95 per cent), and marble (23.22 per cent).

Large-scale manufacturing, which is based on the Quantum Index of Manufacturing (QIM), has witnessed a nominal growth of 0.07 per cent with mixed trend in the production of various groups; e.g., Food (+1.69 per cent), beverages (-3.43 per cent), textile (-8.27 per cent), tobacco (-33.59 per cent), non-metallic mineral products (-3.89 per cent), wood (+12.09 per cent), coke and petroleum (+4.85 per cent), and pharmaceuticals (+23.19 per cent).

The electricity, gas, and water supply industry has shown a negative growth of 10.55 per cent because of a decrease in subsidies in real terms due to high deflator. The construction industry increased by 5.86 per cent due to an increase in construction-related expenditures by private and public sector enterprises.

The services industry has also shown a growth of 1.21 per cent in 2023-24. Detailed analysis of the industry reflects a mixed trend. Wholesale and retail trade has witnessed a growth of 0.32 per cent because of positive growth in agriculture output.

The transport and storage industry has increased by 1.19 per cent because of an increase in the output of railways, water transport, and road transport. Due to high inflation, real growth in information and communication, finance and insurance and public administration and social security industries has become negative at 3.02 per cent, 9.64 per cent, and 5.25 per cent respectively.

Further, both education and human health and social work industries have posted positive growth of 10.30 per cent and 6.80 per cent. respectively. Other private services have been estimated at 3.58 per cent on the basis of indicators received from the sources.

Copyright Business Recorder, 2024

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