ISLAMABAD: Pakistan’s economy grew by a modest 0.92% in the first quarter (July-September) of the current fiscal year, marking a significant decline from 2.3% growth in the same period last year. Despite the PML-N-led coalition government’s claims of economic revival, the first-quarter data presents a less optimistic picture compared to the caretaker government’s performance last year, as shown by the National Accounts Committee (NAC).
The slow growth was mainly attributed to a 1.43% increase in the services sector and a 1.15% rise in agriculture, though the industrial sector experienced a decline of 1.03%, impacting the overall performance. The NAC revised the GDP growth for FY24 slightly downward, adjusting the forecast from 2.52% to 2.50%.
The State Bank of Pakistan (SBP) expects GDP growth to fall within the 2.5% to 3.5% range for FY25, while the International Monetary Fund (IMF) predicts a 3.2% expansion. The Asian Development Bank (ADB) recently raised its growth projection for Pakistan’s GDP to 3%, up from the previous 2.8%.
In the agriculture sector, crop production dropped by 5.93%, with key crops like cotton, maize, and rice seeing significant declines. Cotton production fell by 29.6%, maize by 15.6%, and rice by 1.2%. Other crops grew by 2.08%, while livestock increased by 4.89%, driven by higher production and lower input costs. Forestry and fishing industries also experienced modest growth.
The industrial sector’s contraction slowed from 4.43% in Q1FY24 to 1.03% in Q1FY25. Mining and quarrying saw a 6.49% decline, with coal production down by 12.4%, gas by 6.7%, and crude oil by 19.8%. The Large-Scale Manufacturing (LSM) sector contracted by 0.82%, but the electricity, gas, and water supply industries grew by 0.58%. The construction industry, however, dropped by 14.91%, mainly due to a 16.12% decrease in cement production.
Services grew by 1.43% in Q1FY25, lower than the 2.16% growth in the same period last year. Positive growth came from wholesale and retail trade, accommodation and food services, information and communication, real estate activities, education, and human health and social work activities. However, transportation, storage, public administration, and social security sectors contracted.
According to the NAC, the size of Pakistanβs economy for FY24 stands at Rs105.6 trillion ($373.3 billion), with a per capita income of Rs472,263 ($1,669). The per capita income figures will be updated after the population projections based on the 2023 Population Census are finalized.
