Pakistan Misses Out on GDP Target for FY25

Pakistan’s economy is expected to grow by 2.68 percent in the ongoing fiscal year 2024-25, against earlier projections of 3.6 percent, according to provisional estimates approved by the National Accounts Committee (NAC) during its 113th meeting held at the Pakistan Bureau of Statistics (PBS) in Islamabad. The committee also approved updated quarterly GDP figures for Q1, Q2, and Q3 of FY 2024-25, as well as revised annual estimates for previous years. The economy posted a provisional 2.40 percent growth in Q3, supported primarily by a 3.99 percent expansion in the services sector, while agriculture grew by 1.18 percent and industry contracted by 1.14 percent. In the revised estimates, Q1 and Q2 GDP growth rates have been adjusted to 1.37 percent and 1.53 percent, respectively. These updates reflect improvements in sectors such as other crops, forestry, and services, though industrial activity remained subdued. Notably, electricity, gas, and water supply saw a decline in both quarters, falling to -2.30 percent in Q1 and -3.40 percent in Q2. The Q3 performance showed a mixed picture. While important crops declined by 11.14 percent, other crops posted 4.84 percent growth on the back of strong yields in onion (11 percent) and mango (26 percent). Livestock grew by 4.42 percent, forestry by 4.25 percent, and fishing by 0.50 percent. Industrial output remained negative, dragged by mining and quarrying (-3.96 percent), electricity, gas, and water supply (-7.72 percent), and construction (-9.12 percent). In contrast, services posted solid growth, led by information and communication (18.44 percent), public administration and social security (13.73 percent), and finance and insurance (10.65 percent). The committee finalized annual GDP growth for FY 2022-23 at -0.21 percent, while FY 2023-24 saw a revised growth of 2.51 percent. In FY 2023-24, agriculture improved to 6.40 percent, industry rose slightly to -1.37 percent, while services saw a downward adjustment to 2.19 percent due to lower contributions from transport and healthcare. For FY 2024-25, agriculture is projected to grow by only 0.56 percent due to a significant decline in major crops. Wheat output dropped 8.91 percent to 28.98 million tons, maize by 15.4 percent to 8.24 million tons, rice by 1.38 percent, sugarcane by 3.88 percent, and cotton by a steep 30.7 percent to 7.08 million bales. However, strong gains were recorded in potato (11.5 percent), onion (15.9 percent), mango (26.7 percent), and sesame (44.7 percent). Livestock, forestry, and fishing recorded provisional growth rates of 4.72 percent, 3.03 percent, and 1.42 percent, respectively. The industrial sector is projected to grow by 4.77 percent, supported by a strong recovery in electricity, gas and water supply (28.88 percent), due to a low base from the previous year. Construction activity rose 6.61 percent, while large-scale manufacturing contracted by 1.53 percent. Within manufacturing, mixed trends were observed with strong growth in automobiles (40 percent), tobacco (13.12 percent), and textiles (2.15 percent), but double-digit declines in chemicals, metals, and electrical equipment. Services grew by 2.91 percent, with all components posting positive trends. Information and communication rose by 6.48 percent due to a 24 percent jump in computer programming and consultancy services. Finance and insurance (3.22 percent), public administration (9.92 percent), education (4.43 percent), and health and social work (3.71 percent) all contributed to the expansion. Wholesale and retail trade, however, grew marginally by 0.14 percent due to weaker output in agriculture and manufacturing. The size of Pakistan’s economy has now reached Rs.114.7 trillion (US$ 410.96 billion) in FY 2024-25, up from Rs.105.1 trillion (US$ 371.66 billion) last year. Per capita income rose to Rs. 509,174 or US$ 1,824. However, this figure is subject to revision once updated population projections based on the 2023 census are incorporated. The NAC acknowledged the efforts of the PBS and key stakeholders, including the Ministry of Planning, Ministry of Finance, and the State Bank of Pakistan, in preparing the updated quarterly and annual national accounts data.