The Pakistan Bureau of Statistics (PBS) appears to be counting on a very generous miracle. How else does one justify the provisional GDP growth estimate of 2.68 percent for FY25, when the economy has crawled at an average of 1.77 percent over the first nine months? For that number to hold, the fourth quarter would need to stage a miraculous comeback — clocking in at 5.4 percent growth. Unless there’s an economic fairy godmother we haven’t heard of, the math doesn’t quite add up.
Now, on the surface, 5.4 percent quarterly growth doesn’t sound like a moonshot. It’s happened before — even in recent memory — and sure, it could happen again. But it’s not the headline number that’s raising eyebrows; it’s what’s under the hood.
The composition of the provisional growth estimates has analysts scratching their heads, and some questioning whether the National Accounts Committee (NAC) was playing darts rather than crunching data. To be fair, not all the surprises point to overstatement — sometimes, the figures are just inexplicably odd, no matter which way they tilt.
It’s the industrial growth estimate that truly deserves a standing ovation — or perhaps a fact-check. The sector is projected to grow 4.77 percent in FY25. Sounds plausible enough, right? Until you peek under the hood. Industrial output actually shrank 1.01 percent over the first nine months, which means the fourth quarter is expected to deliver a heroic 22 percent growth. For context, industrial growth has averaged a humble 1.4 percent over the last 35 quarters. The only time it breached the 22 percent mark was in 4QFY21 — a post-Covid base effect anomaly that barely qualifies as organic growth.
And while we’re at it, Large-Scale Manufacturing (LSM) — the heavyweight of industrial output — is estimated to remain in the red, clocking in at -1.53 percent for FY25. That would mark only the fourth contraction in LSM over the past 25 years. But here’s the twist: it would also be the first time in recorded history that full-year industrial growth turns out positive while LSM sulks in the negative. A statistical unicorn, if there ever was one. Apparently, the rest of the industrial sector plans to sprint while its largest component limps.
Of course, just because something’s never happened before doesn’t mean it can’t. All it would take is for the ‘electricity, gas & water supply’ sector to post a modest little surge of… 129 percent. Never mind that its average growth over the past 35 quarters has been a sleepy 4 percent — or that it’s actually contracted by 4.4 percent in 9MFY25. Details, details. Who says miracles are reserved for religion?
With electricity generation and distribution during 9MFY25 at a five-year low, even the most wide-eyed optimist would hesitate to bet on double-digit growth in the final quarter — let alone the triple-digit fantasy needed to make the numbers work. Gas distribution isn’t exactly bursting with activity either, so banking on a last-minute surge borders on wishful thinking. What’s more, growth estimates for both sectors are based on actual data from relevant authorities — and unless those numbers are planning a surprise plot twist in Q4, the chances of runaway growth are slim to none.
Which brings us to the final heroic candidate: the charmingly titled ‘water supply; sewerage, waste management and remediation activities.’ It now falls on this unassuming sub-sector to carry the burden of the 129 percent growth miracle. Unfortunately, there’s a small hitch. According to the GDP methodology itself, “…the quarterly estimates for this activity have been developed by using constant growth.” Translation: the numbers are flat by design. So unless the methodology was quietly tossed out the window, any significant deviation in Q4 is ruled out — making the 129 percent growth estimate not just implausible, but frankly, laughable.
So maybe the burden shifts to the other industrial sub-sector: construction. It’s had a rough 9MFY25, shrinking by 9.3 percent, with an average growth of just 0.3 percent over the last 35 quarters. Yet theNACis betting on a blockbuster comeback in 4QFY25 — projecting an eye-popping 54 percent growth.
Here’s the kicker: the QNA methodology for construction relies on production indicators like cement, iron & steel, and marble. Monthly data for cement and steel — the very engines driving LSM — show double-digit declines, dragging the entire sector down. Even funnier, the NAC expects LSM to remain in the red for 4QFY25, which means cement and steel would have to perform a Houdini act and rebound with unheard-of growth. The only thing keeping this fairy tale alive is the well-worn mantra: stranger things have happened.
There are more such eyebrow-raising quirks — perhaps less jaw-dropping but equally puzzling — like growth in fishing and other private services. Fishing, for instance, has crossed 1 percent growth only once in the last 26 quarters, yet is suddenly forecast to surge 3.3 percent in 4Q. Meanwhile, other private services, which are calculated based on the number of engineers registered with the Pakistan Engineering Council, are expected to hit a five-year peak in the same quarter.
Granted, quarterly GDP estimation is still a relatively new beast, and provisional numbers are always subject to revision. But one can only hope the exercise isn’t just a creative backward-plugging of figures to force-fit an already decided final value — a trick that will feel all too familiar to anyone who’s dealt with the notorious ‘fair’ values at brokerage houses.
Copyright Business Recorder, 2025
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