GDP growth seen at 3pc in FY2021

ISLAMABAD: Pakistan’s gross domestic product (GDP) growth is expected to touch a 3 percent mark in the outgoing fiscal year of 2020/21, official sources said on Wednesday.

There is a possibility of no major revision into finalized GDP growth figures for the last fiscal year that stood at negative 0.4 percent of GDP on provisional account.

The GDP growth might exceed 3 percent mark in the outgoing fiscal year as it will depend upon two major factors including wheat production estimates for the current fiscal year and second large scale manufacturing (LSM) growth figures taking into consideration by the National Accounts Committee (NAC) for calculating the provisional growth figures of the current fiscal year.

Official sources confirmed to The News that Pakistan Bureau of Statistics (PBS) had incorporated possible losses to the national economy for the fourth quarter (April-June) period of the last fiscal year while calculating the provisional GDP growth figures and they had estimated that the growth stood at negative 0.38 percent. If the PBS had not incorporated the possible losses of fourth quarter in the last fiscal year the GDP growth might have nosedived to negative 1.5 to 2 percent of GDP.

It was quite embarrassing for the PBS when the provisional GDP growth figure of 3.3 percent for 2017-18 was revised downward to 1.9 percent in finalised figure so it proved correct that the PBS decided to include possible/expected losses in the fourth quarter for calculating the GDP growth of last fiscal year that had estimated that it stood at negative 0.38 percent.

Now it is hoped that there would be slight revision upward or downward into finalized GDP growth for the last fiscal year.

For the outgoing fiscal year, the government had envisaged GDP growth rate of 2.1 percent and the IMF and World Bank had predicted the GDP growth in the range of 1.5 percent for the current fiscal year.

Now it is expected that the GDP growth would touch 3 percent mark during the current fiscal year. The GDP growth might further exceed in the wake of increased wheat production as the federal agriculture committee estimated wheat production of 26.2 million tons for the current fiscal year.

It is yet to see how much wheat production is presented by the provincial crop reporting during the upcoming National Accounts Committee (NAC) meeting. There are upward estimates that the wheat production in Punjab has gone up from 19.2 million tons to 20.9 million tons so overall production has gone up to 28 million tons.

It might be too much ambitious wheat production number so it is yet to see how much figure the NAC takes into account for calculating growth figures.

The second factor that might play an important role for calculating GDP growth would be taking into account growth figure of large scale manufacturing as it was expected to witnessed marvelous growth in the last three months of the current fiscal because the COVID-19 pandemic had faced severe growth in the same period of the last fiscal year.

By taking all these factors into account, Pakistan’s GDP growth would be hovering around 3 percent for the current fiscal year, however, it would be much less than for impacting effectively for reducing poverty and unemployment in the country.

Pakistan requires at least 6 to 7 percent GDP growth on sustained basis for tackling menace of poverty and unemployment in the country so the monster of poverty and unemployment was bound to go up with GDP growth figures hovering around 3 percent for the outgoing fiscal year ending on June 30, 2021.