With 6% growth rate, Pakistan's economic size jumps to $383 billion
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Loading... - Onveer Gaval
- 19 May 2022
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Fueled by imports and consumption, Pakistan’s economic growth rate accelerated to 6% during the last year of Imran Khan’s government – the highest pace in four years – helping to increase the size of the nation’s economy to $383 billion besides jacking up per-capita income.
The provisional Gross Domestic Product (GDP) growth rate for the year 2021-22 is estimated at 5.97%, announced the Planning Ministry after a meeting of the National Accounts Committee. The broad-based growth was witnessed in all the sectors of the economy, it added. The GDP is the monetary value of all goods and services produced in a year.
The nearly 6% growth rate is higher than the official target of 4.8% and far higher than the estimates of the Ministry of Finance, State Bank of Pakistan, International Monetary Fund, World Bank and the Asian Development Bank.
The figure is provisional and subject to variations once the final results are available at the end of the fiscal year. The economic growth rate during the last two years of the PTI rule was slightly better than the PML-N’s last two years but both the governments failed to address structural problems of Pakistan’s economy.
An attempt had been made to downplay the growth figures in the last year of the PTI government but the authorities dropped the plan after a report appeared in The Express Tribune.
I have asked the Pakistan Bureau of Statistics to certify that the methodology to work out the GDP growth was consistent with the past, said the Planning Ministry secretary in-charge Dawood Barech.
He maintained that the Planning Minister Ahsan Iqbal did not influence the NAC proceedings.
The details showed that the massive surge in imports and consumption greased the economic growth rate, which has already triggered a serious external sector crisis – an identical pattern witnessed in 2018 when the country fell in the lap of the International Monetary Fund.
The 6% growth rate at the end of the Pakistan Tehreek-e-Insaf government was the highest in four years. Last time, the country attained a 6.1% growth rate in 2017-18 – the last year of the PML-N rule, which had also been driven by consumption and imports and took the country back to the IMF.
During 2017-2018 and 2021-2022, Pakistan’s growth was largely financed through foreign savings, which is highly unsustainable.
The agriculture sector is provisionally estimated to grow by 4.4%, nearly 1% better than the previous year. On the back of the Large Scale Manufacturing sector, the industrial sector grew at the rate of 7.2%, lower than the previous fiscal year. The growth in the services sector was slightly better than the previous fiscal year, standing at 6.2%. The mining sector witnessed contraction.
Had the annual imports remained at the projected level of $55 billion in this fiscal year, the overall economic growth rate would have remained around 5%, according to a senior official of the Planning Ministry. The better crop production also supported the higher growth, except for wheat whose output decreased by one million metric tons to 26.4 million metric tons.
The size of the economy reached nearly Rs67 trillion in 2021-22 – about Rs3 trillion higher than the estimates, which will also help the government to get additional fiscal spending space. In dollars terms, the volume of the economy in 2021-22 stands at $383 billion, according to the Planning Ministry. Read More…
