ISLAMABAD: After rebasing of national accounts, the economic growth touched 5.97 percent in the current financial year ending June 2022, slightly faster than the 5.74 in the previous year, the government said on Wednesday.
For the current fiscal year 2021-22, provisional GDP growth rate has been estimated at 5.97 percent, with growth of the agricultural, industrial, and services sectors at 4.40 percent, 7.19 percent, and 6.19 percent, respectively. Several independent economists pinned the higher GDP numbers on imports and consumption-led growth.
Pakistan’s GDP at current market prices has reached Rs66.949 trillion in 2021-22, resulting in an increase in per capita income from Rs268,223 in 2020-21 to Rs314,353 in 2021-22. In US dollar terms, the per capita income increased from 1,676 in 2020-21 to 1,798 in 2021-22. Volume of the stands at $383 billion
The National Accounts Committee (NAC) met under the chair of federal secretary of planning and approved rebasing of national accounts from the fiscal year 2005-06 to 2015-16. The forum also approved a revised GDP growth figure of 5.74 percent for the last fiscal year 2020-21 and a negative 0.94 percent for 2019-20.
Following the meeting, federal secretary ministry of planning told journalists that they had directed the Pakistan Bureau of Statistics (PBS) to authenticate the methodology of calculating the GDP growth figures. He also made it categorically clear that there was no pressure on them from the minister of planning. Independent economists, however, termed it as low quality but higher growth, which did not help add more job opportunities.
Former finance minister Shaukat Tarin said that 6 percent of GDP growth in 2022 “is a slap in the face of Pakistan Democratic Movement who called us selected and incompetent”.
“Such performance after Covid is spectacular. Bravo leadership of Prime Minister Imran khan and the PTI economic team,” Tarin said in a tweet. “PDM now try to match our performance”.
Meanwhile, Planning Commission’s Chief Economist Dr Mohammad Ahmed Zubair resigned from his position, allegedly because of differences over the GDP growth figures.
Zubair said: “I would like to state that the Pakistan Bureau of Statistics (PBS) has the mandate to estimate National Accounts and that the Ministry of Planning, Development and Special Initiatives has no role in matters related to estimating the GDP growth. In this regard, I wish to categorically state that there was no influence exercised on me from within the Ministry of Planning, Development and Special Initiatives on matters related to National Accounts for FY2022.”
Pakistan’s growth trajectory has often been described as a “boom and bust cycle” in the last many decades. Higher growth rate always resulted in creating imbalances such as higher budget and current account deficit. The growth rate has never sustained for long.
Imports have been projected to stand at $75 billion against initial estimates of $55 billion, which contributed almost one percent of GDP, jacking up the overall growth rate.
Apart from the expansionary fiscal and monetary policies fuelling higher growth, the economy has been brought to the brink of insolvency on repayments of its foreign loans and obligations. Pakistan and the IMF have kick-started parleys in Doha (Qatar) for reviving the stalled IMF programme under the $6 billion Extended Fund Facility (EFF).
Cotton crop increased to 8.3 million bales from 7.1 million bales; rice to 9.3 million tonnes from 8.4 million tonnes; sugarcane to 88.7 million tonnes from 81.0 tonnes; maize to 10.6 million tonnes from 8.4 million tonnes; whereas wheat
production decreased to 26.4 million tonnes from 27.5 million tonnes.
Other crops showed growth of 5.44 percent mainly because of an increase in production of pulses, vegetables, fodder, oilseeds and fruits. Livestock sector showed growth of 3.26 percent, forestry 3.13 percent and growth of fishing stood at 0.35 percent.
The overall industrial sector showed an increase of 7.19 percent provisionally. Mining and quarrying sector decreased 4.47 percent due to fall in production of other minerals.
Large-scale manufacturing industry, primarily driven by QIM data (from July 2021 to March 2022), showed an increase of 10.4 percent.
Major contributors to this growth included food (11.67 percent), tobacco (16.7 percent), textile (3.19 percent), wearing apparel (33.95 percent), wood products (157.5 percent), chemicals (7.79 percent), iron and steel products (16.55 percent), automobiles (54.10 percent), furniture (301.83 percent) and other manufacturing (37.83 percent). Electricity, gas and water industry showed a growth of 7.86 percent mainly due to increase in subsidies from Rs366.4 billion in 2020-21 to Rs567.0 billion in 2021-22.
Value-added in construction industry, mainly driven by construction-related expenditures by industries, registered a modest growth of 3.14 percent due to an increase in general government spending.
This moderate growth rate is due to an unusual increase of 30.1 percent in relevant deflator ie WPI building material.
Services sector grew 6.19 percent, and wholesale and retail trade industry grew 10.04 percent.
It is dependent on the output of agriculture, manufacturing and imports.
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