According to official sources, on Wednesday, Pakistan’s gross domestic product (GDP) growth in the current fiscal year is forecast to reach 3%. There is a chance that the finalized GDP growth estimates for the previous fiscal year, which were negative 0.4 per cent of GDP on a provisional basis, would not be significantly revised.
GDP growth in the current fiscal year could surpass 3%. This depends on two major factors; firstly, on the wheat output projections for the current fiscal year. Secondly, on the large scale manufacturing (LSM) growth figures. These are taken into account by the National Accounts Committee (NAC). It is for the purpose of estimating provisional growth rates for the current fiscal year.
Fourth Quarter Estimation by PBS
Official sources told The News that the Pakistan Bureau of Statistics (PBS) had factored in potential national economic losses when calculating provisional GDP growth figures for the fourth quarter (April-June) of the previous fiscal year, estimating that the growth was negative 0.38 per cent.
Decrease in GDP for 1.9 p.c. 2017-18
There was a chance that the GDP growth may have sunk to negative 1.5 to 2 per cent of GDP. However, this depends on if the PBS had not factored in potential losses in the fourth quarter of the previous fiscal year. When the preliminary GDP growth figure of 3.3 per cent for 2017-18 was revised downward to 1.9 per cent in the finalized figure, it was quite humiliating for the PBS.
Expected Crust and Trough
It is now expected that the finalized GDP growth for the previous fiscal year would be revised slightly upward. The government forecasted a 2.1 per cent Gross Domestic Product growth rate for the previous fiscal year. Meanwhile, the IMF and World Bank projected GDP growth in the range of 1.5 per cent for the current fiscal year.
It is now predicted that GDP growth will exceed 3% in the current fiscal year. Enhanced wheat production, which the federal agriculture committee projected at 26.2 million tons for the current fiscal year, could boost GDP growth even more.
Wheat Production in Pakistan
The National Accounts Committee (NAC) meeting is scheduled for this year. It will determine how much wheat output is presented by provincial crop reporting. According to estimates, wheat production in Punjab has increased from 19.2 million tons to 20.9 million tons. This brings the total production to 28 million tons. It’s unclear how much of a figure the NAC considers when estimating growth figures. It is possible that it may be an overly optimistic wheat output estimate.
Large Scale Manufacturing
The second factor that could play a role in measuring GDP growth is taking into account large-scale manufacturing growth. This was projected to be phenomenal in the last three months of the current fiscal year due to the COVID-19 pandemic. This allowed the country to experience extreme growth in the same timeframe of the previous fiscal year.
Conclusion
Taking all of these factors into account, Pakistan’s GDP growth for the current fiscal year will be about 3%. This is far less than what is needed to effectively reduce poverty and unemployment in the country. To combat the threat of poverty and unemployability, Pakistan needs a sustained Gross Domestic Product growth rate of at least 6 to 7%.
