Economic Growth in Pakistan Plummets: Analysis - Capital TV

May 28, 2023


Economic Growth in Pakistan Plummets: Analysis

Anum Razzaque

KARACHI: Pakistan’s economic growth rate in the outgoing fiscal year has sharply declined to 0.3%, largely attributed to severe import restrictions aimed at avoiding a sovereign default.

The restrictive measures have adversely affected the industrial sector, leading to spillover effects on the services sector.

However, the recorded growth rate of 0.29% is the lowest increase in national output over the past four years, highlighting the mismanagement of the economy and its inadequacy in meeting the needs of the country’s 250 million population.

Read more: Pakistan Sees Negative Growth in Exports

Despite facing severe floods, the agricultural sector surprisingly posted a growth rate of 1.6%, surpassing expectations of contraction caused by the devastating impact on crops. However, the industrial sector experienced a contraction of 2.94%.

Hence, the services sector, being the largest sector in the economy, showed nominal growth of 0.9%.

The government’s failure to achieve sectoral targets is indicative of economic mismanagement, which has resulted in significant job losses and contributed to an alarming inflation rate of 36.4%, the highest in 59 years.

Meanwhile, In a controversial move, the National Accounts Committee convened a meeting and approved the provisional Gross Domestic Product (GDP) growth rate for the fiscal year 2022-23, which will conclude on June 30. The meeting was chaired by Planning Secretary Zafar Ali Shah.

Follow: IMF Predicts Pakistan’s Growth to be Slashed

The government’s devaluation of the rupee and the subsequent increase in utility prices, aimed at securing a deal with the IMF, have resulted in significant economic losses. Unfortunately, neither the IMF program could be revived nor the economy saved from impending disaster.

However, the provisional Gross Domestic Product (GDP) growth rate for the fiscal year 2022-23 has been estimated at 0.29%, as announced by the Planning Secretary after the National Accounts Committee meeting.

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