Pakistan’s Economy Shows Signs of Growth with 3.07% GDP Increase in Q4 FY24

Pakistan’s Economy Shows Signs of Growth with 3.07% GDP Increase in Q4 FY24

In a promising development, Pakistan’s gross domestic product (GDP) grew by 3.07% in the fourth quarter of fiscal year 2023-24 (April-June), according to data released by the Pakistan Bureau of Statistics (PBS). This growth was driven primarily by a strong performance in the agriculture sector, which grew by 6.76%.

Sectoral Growth in Q4 FY24

The growth across various sectors during the fourth quarter reflects mixed trends:

• Agriculture: Leading the recovery with an impressive growth rate of 6.76%.
• Industry: Witnessed a contraction, with growth shrinking by -3.59%.
• Services: Registered a growth of 3.69%, continuing to contribute to overall economic expansion.

The agriculture sector’s robust performance is largely attributed to improvements in key crops, particularly wheat production.

GDP Growth in FY24

For the entire fiscal year (FY24), Pakistan’s GDP grew by 2.52%, surpassing earlier estimates of 2.38%. This updated figure reflects the following sectoral contributions:

• Agriculture: Grew by 6.36%.
• Industry: Faced a decline of -1.15%.
• Services: Grew by 2.15%, showing resilience in various sub-sectors.

The overall positive trajectory of agriculture was driven by double-digit growth in important crops like wheat, which improved from 31.438 to 31.583 million tonnes.

Revised Estimates for Previous Quarters

The National Accounts Committee (NAC) also revised the GDP growth rates for the first three quarters of FY24:

• Q1: Revised growth of 2.69% (previously 2.71%).
• Q2: Revised to 1.97% (previously 1.79%).
• Q3: Revised to 2.36% (previously 2.09%).

The updated provisional figures present a clearer picture of the country’s economic performance throughout the year, showcasing gradual recovery despite challenges in the industrial sector.

Economic Outlook for FY25

Looking ahead, projections for Pakistan’s GDP growth in fiscal year 2024-25 (FY25) range from 2.5% to 3.0%, according to Topline Securities. The expected growth is distributed as follows:

• Agriculture: Forecast to grow by 1.7%.
• Industry: Expected to recover with 2.1% growth.
• Services: Likely to grow by 3.4%.

International institutions have also weighed in, with the International Monetary Fund (IMF) projecting GDP growth of 3.2% for FY25, slightly higher than the Asian Development Bank’s (ADB) forecast of 2.8%.

Conclusion

Pakistan’s economy has demonstrated resilience, particularly in agriculture, which has helped offset weaknesses in other sectors. The steady GDP growth in Q4 FY24 provides optimism for future economic performance, with projected growth in FY25 anticipated to further stabilize the economy.