Thursday, May 25, 2023

NAC meeting: All major macroeconomic targets missed

Growth rate contracts to 0.29% in outgoing fiscal year 2022-23 — lowest in four years

A representational image of GDP. — Canva
A representational image of GDP. — Canva

  • Growth rate contracts to 0.29% in fiscal year 2022-23.
  • Low level of growth will result in rising poverty, unemployment.
  • Agricultural sector witnesses 1.6% growth.

ISLAMABAD: The latest figures shared with the National Accounts Committee (NAC) painted a bleak picture of the economy as the coalition government could not achieve any of the economic targets it promised to deliver during the outgoing fiscal year 2022-23, The News reported.

In line with the projections of all the international financial institutions, Prime Minister Shehbaz Sharif-led government has missed all the major targets including the provisional gross domestic product (GDP) — which was set at 5% for the current fiscal year. 

The growth rate remained dismally low and stood at 0.29%  — the lowest increase in the last four years — against the revised figure of 6.1% in the last financial year 2021-22.

It should be noted that this low level of growth will result in rising poverty and unemployment; however, there are no official figures available on these two important fronts. 

The size of the GDP in the rupee term stood at Rs38.927 trillion for the outgoing fiscal year against Rs38.814 trillion in the last fiscal year 2021-22.

The Planning Commission’s Chief Economist Dr Nadeem Javaid told journalists that the devastating floods, lingering political instability, global recession and Ukraine war accelerated the woes for the Pakistan economy but the resilience shown by the country’s different economic sectors produced a slight positive growth in the current fiscal year. 

The National Accounts Committee, which met under the chairmanship of Secretary Planning Syed Zafar Ali Shah, approved the provisional figures:

  • GDP growth rate — 0.29% 
  • Agriculture growth — 1.55%
  • Industrial sector — -2.94%
  • Services sector — 0.86%

Reportedly there was immense pressure on the officials of the Pakistan Bureau of Statistics (PBS) and other high-ups for turning the GDP growth from negative to positive. 

It started from negative 1% to negative 0.5% but finally, the NAC approved a positive GDP growth figure of 0.29% after a lot of debate among the Ministry of Finance, State Bank of Pakistan (SBP) and Ministry of Planning high-ups. 

Fiscal year 2021-22Fiscal year 2022-23
Livestock 2.25%
Cotton ginning9.22%

The negative growth trajectory was turned into a positive as eyebrows raised over the education sector growth figure of 10.44%. Human health and social work-related activities also suddenly achieved 8.49% growth in the current fiscal year.

Out of the agriculture sector growth of positive 1.55%, the growth of important crops remained negative 2.49% but the production of wheat at 27.6 million tons helped the agri sector achieve positive growth. 

The cotton achieved just 4.5 million bales and achieved negative 41% growth. The livestock sector posted positive growth of 3.78%. 

Out of the industrial sector, the large-scale manufacturing growth remained negative at 7.98% but interestingly small-scale manufacturing achieved positive growth of 9.03%. The construction sector contracted by 5.53%. 

The electricity generation and gas distribution sector grew 6.03% which also raised eyebrows. The services sector grew by 0.86%. The wholesale and retail trade clinched negative growth of 4.46%. 

When the PBS Chief Dr Naeem Uz Zafar was inquired whether there was any pressure on the PBS for achieving positive growth, he said that there was no pressure from any side and they had done their work professionally to achieve the provisional growth figures.