ISLAMABAD, Nov 28 (APP): The economy of the country witnessed recovery during the first quarter (Q1) of the fiscal year 2023-24 and posted a growth of 2.13 percent as compared to the increase of 0.96 percent during the same period of last financial year (2022-23), according to the latest estimates of National Accounts Committee (NAC).
The 107th meeting of the National Accounts Committee (NAC), to review the annual estimates of Gross Domestic Product (GDP) for the years 2021-22 (Final), 2022-23 (Revised) and quarterly estimates from Q1 2016-17 to Q1 2023-24, was held here under the chairmanship Secretary Ministry of Planning, Development and Special Initiatives.
During Q1 2023-24, the overall growth in services was recorded at 0.82% whereas that of Wholesale and Retail Trade, which is based on output of agriculture, manufacturing and imports, has been estimated at 3.05% because of positive growth in agriculture and industry.
Transport sector showed growth of 1.7% whereas Information & Communication, which remained negative in most of the quarters last year has changed its direction by posting 2.4% growth.
Finance and Insurance industry witnessed negative growth of 12.79% because of decline in output of insurance companies, exchange brokers, mercantile brokers and also high growth in deflator.
Public administration (which is based on the budget documents of federal, provincial, district and cantonments/local government) has reported 6.65% negative growth in Q1 2023-24.
Further, high deflator also resulted in decline in constant prices while negative growth in both education and human health & social work activities are mostly driven by the decline in government budget data along with high deflator.
Meanwhile, the revised growth rate of GDP for the year 2022-23 was estimated at -0.17%, which was provisionally estimated at 0.29%. In the revised estimates, agriculture has significantly improved from 1.55% to 2.25%. Despite reduction in the production of sugarcane (from 91.1 to 88.0 M.Tons), important crops have been revised upward from -3.20% to 0.42% due to increase in production of wheat (from 27.6 to 28.2 M.Tons) and maize (from 10.2 to 11.0 M.Tons).
The other crops have declined from 0.23% to -0.93% due to a decline in production of green fodder (from 192.2 to 190.0 M.Tons), fruits (-5.6%) and oilseeds (-9.7%). Forestry has improved in revised estimates from 3.93% to 14.2% due to higher production reported by Punjab province.
Despite improvement in electricity, gas and water supply (from 6.03% to 9.84%), the industrial sector growth has declined from -2.94% to -3.76% in the revised estimates due to decrease in LSM (from -7.98% to -9.87%) and construction (from -5.53% to -9.16%).
The services sector growth has also declined from 0.86% to 0.07% due to transportation and storage (from 4.73% to 3.27%), information & communication (from 6.93% to -2.55%), finance & insurance (from -3.82% to -8.09%), public administration and social security (from -7.76% to -8.99%), and education (from 10.44% to 9.94%).
In the revised estimates, wholesale and retail trade slightly improved from -4.46% to -4.01% whereas human health and social work improved from 8.49% to 10.57%.
A press statement issued by the Planning Division said that in order to meet the structural benchmark under the IMF-SBA program, PBS held meetings with stakeholders and data providers and presented the revised GDP numbers for 2022-23 and Q1 2023-24 before the NAC on 28th November 2023.
The committee approved the QNA series from 2016-17 to 2022-23 and also approved the first quarter estimates of 2023- 24 along with data dissemination and revision policy. GVA growth rate of 2.13% has been estimated for Q1 2023-24 as compared to Q1 2022-23.
Agriculture has shown a growth of 5.06%, industry 2.48% and services 0.82%. In agriculture, crops are posting healthy growth of 6.13% including 11.16% growth in important crops.
The major driver for growth in important crops is the increase in sowing area in comparison with the last year. For instance, the sowing area for rice, cotton and maize increased by 21%, 11%, and 5%, respectively. It declined by 11% for sugarcane which is offset by the other three major crops.
Industry, after witnessing a continuous decline in three quarters in 2022-23 except a modest growth in Q2, has changed its direction in Q1 2023-24 by posting a growth of 2.48%.
Mining and quarrying industry is showing positive growth of 2.15% on the basis of quarterly production of mining sector. LSM growth is on the basis of Quantum Index of manufacturing (QIM) which showed a growth of 0.93% in Q1 2023-24.
A growth of 0.08% has been reported in Electricity generation and distribution, gas distribution and water supply. Construction industry growth has been estimated at 1.73% on the basis of output of construction indicators. Production of cement has increased by 15.38% during Q1 of 2023-24 as compared to the same quarter last year.
Similarly increase in other indicators has also been witnessed. Iron & steel observed negative growth of 2.20% during Q1 2023-24 however its impact has been offset by other indicators.
The GDP estimates have been released to meet IMF structural benchmark under tight deadline and are based on available information and data. However, as a matter of practice and due to the time-lag involved in the finalization of data for the last two fiscal years, the annual GDP estimates are subject to revision in the NAC meeting to be held in May 2024.
