Pakistan’s economy witnessed a stunted growth of merely 0.3% in the last fiscal year, mainly due to stringent import restrictions enacted to stave off a potential sovereign default. This resulted in a crippled industrial sector and consequential impacts on services.
The figures unveiled to the National Accounts Committee (NAC) indicated a dreary economic outlook, with the government failing to fulfill its economic promises for the fiscal year 2022-23.
Despite the expectations of multiple international financial organizations, the administration led by Prime Minister Shehbaz Sharif couldn’t meet the critical goals, including the provisional gross domestic product (GDP) target set at 5% for the current fiscal year.
With an abysmal growth rate of only 0.29%, the lowest in the past four years, the economy contrasts sharply with the revised growth rate of 6.1% recorded in the financial year 2021-22.
Such stagnant growth typically heralds an escalation in poverty and unemployment, although official statistics on these fronts are currently unavailable.
Pakistan’s GDP stood at Rs38.927 trillion this fiscal year, slightly increasing from Rs38.814 trillion in the previous financial year, 2021-22.
Dr. Nadeem Javaid, the Chief Economist of the Planning Commission, attributed the economic strain to several factors: devastating floods, protracted political instability, a global recession, and the Ukraine conflict. Yet, he noted that the country’s various economic sectors had demonstrated resilience, leading to small yet positive growth.
The NAC, presided over by Secretary Planning Syed Zafar Ali Shah, approved the provisional figures, with the GDP growth rate at 0.29%, agricultural growth at 1.55%, the industrial sector at -2.94%, and the services sector at 0.86%.
It’s reported that officials from the Pakistan Bureau of Statistics (PBS) and other key authorities faced significant pressure to push the GDP growth from negative to positive.
Following extensive deliberations among representatives from the Ministry of Finance, State Bank of Pakistan (SBP), and Ministry of Planning, the NAC finally approved a positive GDP growth figure of 0.29%.
Significant skepticism arose over a 10.44% growth figure in the education sector and an 8.49% growth in health and social work-related activities.
The agricultural sector grew 1.55%, despite negative growth of 2.49% in crucial crops. A yield of 27.6 million tons of wheat helped to offset this deficit and contribute to positive growth.
In contrast, the cotton industry saw a severe slump of 41% growth, producing a mere 4.5 million bales. However, the livestock sector posted a positive growth of 3.78%.
On the industrial front, large-scale manufacturing saw a decline of 7.98%. On the other hand, small-scale manufacturing surprisingly demonstrated positive growth at 9.03%, while the construction sector shrank by 5.53%.
The electricity generation and gas distribution sector saw a 6.03% growth, while the services sector grew by 0.86%. On the other hand, the wholesale and retail trade suffered a negative growth of 4.46%.
When questioned about possible pressure to report positive growth, PBS Chief Dr. Naeem Uz Zafar denied any such influence, asserting that their professional integrity upheld the provisional growth figures.