Thursday May 20, 2021
ISLAMABAD: Official sources have predicted that Pakistan's Gross Domestic Product (GDP) growth is expected to touch a 3% mark in the outgoing FY2021 year.
As per a report in The News, there is a possibility of no major revision into finalized GDP growth figures for the last fiscal year that stood at negative 0.4% of GDP on provisional account.
Sources said the GDP growth might exceed the 3% mark due to two factors; wheat production estimates for the current fiscal year and large scale manufacturing (LSM) growth figures taken into consideration by the National Accounts Committee (NAC) for calculating the provisional growth figures of the current fiscal year.
Official sources confirmed to The News that Pakistan Bureau of Statistics (PBS) had incorporated possible losses to the national economy for the fourth quarter (April-June) period of the last fiscal year, while calculating the provisional GDP growth figures and they had estimated that the growth stood at negative 0.38%.
If the PBS had not incorporated the possible losses of fourth quarter in the last fiscal year, the GDP growth might have nosedived to negative a 1.5 to 2% of the GDP.
The PBS was faced with an embarrassing conundrum when the provisional GDP growth figure of 3.3% for 2017-18 was revised downward to 1.9% in the finalised figure.
Hence it proved correct that the PBS decided to include possible/expected losses in the fourth quarter for calculating the GDP growth of the last fiscal year that estimated that it stood at a negative 0.38%.
It is hoped that there will be a slight revision in the upward or downward direction into the finalized GDP growth for the last fiscal year.
The government had earlied estimated a GDP growth of 2.1% for the outgoing fiscal year. The IMF and the World Bank, on the other hand, had predicted the GDP growth in the range of 1.5% for the current fiscal year.
Now, it is expected that the GDP will touch the 3% mark. As mentioned above, the GDP growth might even further exceed in the wake of increased wheat production, as the federal agriculture committee estimated wheat production of 26.2 million tons for the current fiscal year.
It is yet to see how much wheat production is presented by the provincial crop reporting during the upcoming National Accounts Committee (NAC) meeting. There are upward estimates that the wheat production in Punjab has gone up from 19.2 million tons to 20.9 million tons so overall production has gone up to 28 million tons.
It might be too ambitious a figure for wheat production, hence it is yet to see how much the NAC takes into account for calculating growth figures.
The second factor that might play an important role for calculating GDP growth would be taking into account growth figure of large scale manufacturing as it was expected to witnessed marvelous growth in the last three months of the current fiscal.
This because the COVID-19 pandemic had caused a setback to teh manufacturing industry in the same period of the last fiscal year.
By taking all these factors into account, Pakistan’s GDP growth will be hovering around 3% for the current fiscal year, however, it will not make much difference in either eradicating poverty or drastically reducing unemployment across Pakistan.
Pakistan requires at least 6 to 7% GDP growth on a sustained basis for tackling the menace of poverty and unemployment in the country.