Pakistan’s GDP growth revised to 2.5pc in FY24

The National Accounts Committee (NAC) of Pakistan has approved the revised annual growth rates for FY 2022-23 and FY 2023-24, along with the Q1 GDP growth rate for FY 2024-25, ARY News reported.

According to the official press release, the updated growth rate for FY 2023-24 has been revised down to 2.50 percent (pc), slightly lower than the previously estimated 2.52pc. The committee noted an improvement in important crops, from 17.02pc to 17.12pc.

However, agricultural growth in Pakistan saw a slight dip to 6.18pc from 6.36pc, primarily due to a downward revision in forestry production, which fell from 3.05pc to -0.89pc, attributed to lower timber production.

The industrial sector showed a worsened contraction, moving from a previous estimate of -1.15pc to -1.65pc. The mining and quarrying sector witnessed a significant decline, with growth moving from 3.47pc to -4.16pc, driven by reduced production in coal (-5.21pc) and limestone (-25.8pc) in Khyber Pakhtunkhwa and Balochistan provinces.

On a positive note, the services sector showed improvements, with transport growing from 1.91pc to 2.12pc, information and communication increasing from 0.30pc to 3.45pc, and education rising from 8.55pc to 9.05pc. Health services also saw growth, improving from 5.55pc to 5.99pc. As a result, the overall growth of the services sector improved from 2.15pc to 2.35pc.

The committee’s decisions reflect a mixed performance across sectors, with some areas showing resilience, while others continue to face challenges. Further assessments and measures will likely follow to address the ongoing concerns in agriculture and industry.

On December 26, Finance Minister Muhammad Aurangzeb vowed to take Tax-to-GDP ratio to 13 per cent in three years in Pakistan.

He was addressing a news conference alongside Minister for Information and Broadcasting Attaullah Tarar and Minister of State for Finance Ali Pervez Malik in Islamabad today.

Muhammad Aurangzeb said taxation reforms have a key role in fiscal stability. He said the country has been languishing between 9-10 per cent in terms of tax to GDP ratio but we have set a target of 13.5 per cent for next three years to improve this standing.

The finance minister said digitalization of FBR is aimed at enhancing transparency. He said that approval of design phase of digitalization was given by Prime Minister Shehbaz Sharif in September this year and now we are in execution phase of this process.