Economy posts modest growth of 1 percent in second quarter: NAC

Economy witnessed upward revision in 1st quarter by posting growth of 2.50pc as compared to 2.13pc

ISLAMABAD  -  National Accounts Committee (NAC) Thursday approved GDP growth estimates for the 2nd quarter of financial year 2023-24, where gross domestic prod­uct (GDP) has shown a nominal growth of only 1 percent.

During the 2nd quarter, under the caretaker government, the in­dustry, mining and construction industry have shown negative growth, while services industry has recorded a nominal growth of 0.01% in 2nd quarter of 2023-24. However, economy witnessed upward revision in 1st quarter 2023-24 by posting a growth of 2.50% as compared to 2.13pc. 

The 108th meeting of the National Accounts Committee (NAC) to review the quarterly es­timates of gross domestic prod­uct (GDP) for 1st and 2nd quar­ters for the years 2023-24 was held with Secretary Planning in chair. The 107th NAC meeting held back in November 2023 had approved the introduction of Quarterly National Accounts (QNAs) in the statistical system of the country. QNAs provide the pulse of the economy at a shorter interval as compared to the An­nual National Accounts (ANA). 

The statement released follow­ing the NAC meeting said that during 2nd quarter of 2023-24, the economy posted a modest growth of 1.0%. Agriculture has shown a growth of 5.02% as com­pared to same period of last year mainly due to healthy growth in important crops (8.12%) be­cause of significant growth in the final production of cotton, rice and maize, first estimate of wheat (6.7% increase in area) and cot­ton ginning (53.6%). Livestock is at the same level while for­estry and fishing have also re­tained their normal growth. 

Industry in 2nd quarter, like 1st quarter, has shown a nega­tive growth (-0.84%) as com­pared to same period of the last fiscal year. Mining & quarrying industry has witnessed nega­tive growth of 4.17% because of decrease in production of gas (-5.04%), marble (-40.13%), limestone (-20%) etc. and de­cline in exploration cost. Large scale manufacturing, which is based on Quantum Index of Manufacturing (QIM), has wit­nessed a positive growth of 0.35% due to increase in cook­ing oil, garments, fertilizers, etc. Electricity, gas and water supply industry has shown a positive growth of 1.54% because of in­crease in output of IPPs, hydro and nuclear plants. Construction industry declined to -17.59% due to decrease in production of cement (-8.7%) and iron & steel (-2.5%) as well as decline in gen­eral government expenditure. 

Services industry has shown a nominal growth of 0.01% in 2nd quarter of 2023-24. Detailed analysis of the industry reflects a mixed trend. Wholesale and re­tail trade has witnessed a growth of 2.11% because of positive growth in agriculture output and LSM. Transport and storage in­dustry has increased by 1.13% because of increase in output of railways and road transport. 

Due to high inflation, real growth in information & com­munication, finance & insur­ance and public administration and social security industries has become negative at 5.43%, 11.1% and 16.18% respectively. Further, both education and hu­man health and social work in­dustries have posted negative growth at 0.85% and 2.53% respectively. Other private ser­vices have been estimated at 3.63% on the basis of indicators received from the sources.

The committee approved the revised first quarter estimates of 2023-24. Overall GDP for Q1 for financial year 2023-24 has witnessed a revised growth of 2.50% as compared to 2.13% estimated in 107th NAC meet­ing. Growth in agriculture has witnessed a healthy revision to 8.58% from 5.06% mainly due to upward revisions in crops posting a double digit growth of 17.66% as compared to 6.13%. The important crops, which were previously estimated based on area, has witnessed a phenom­enal growth of 31.47% because of very low base in 2022-23 and significant increase in produc­tion in final estimates of cotton (increased by 108.2% to 10.22 million bales this year against 4.91 million bales last year), rice (increased by 34.8% to 9.87 mil­lion tons vs. 7.32 million tons last year) and maize (5.6%). 

Despite improvement in min­ing and quarrying (from 2.15% to 7.78%), industry has wit­nessed a downward revision to -0.24% as compared to growth of 2.48% mainly due to downward revisions in LSM (from 0.68% to -0.87% in QIM), electricity, gas and water supply (from 0.08% to -12.70%) and construction (from 1.73% to 0.74%). The ser­vices have posted a modest im­provement from 0.82% to 0.92% due to finance and insurance (from -12.79% to -2.88%).

ePaper - Nawaiwaqt