Pakistan’s economy rebounds with 2.38 per cent growth in FY2023-24

WEB DESK: Pakistan’s economic landscape has witnessed a notable turnaround, with the real Gross Domestic Product (GDP) recording a growth of 2.38 per cent in the fiscal year 2023-24.

This positive momentum marks a significant shift from the previous year’s negative growth of 0.21 per cent.

While this growth falls short of the targeted 3.5 per cent, it underscores a remarkable recovery bolstered by prudent policy management and renewed inflows from both multilateral and bilateral partners.

The Economic Survey of Pakistan for 2023-24

The Economic Survey of Pakistan for 2023-24, unveiled recently, highlights key factors contributing to this turnaround. The resumption of economic activities in major trading partners, coupled with strategic policy interventions, has steered the economy towards a path of growth.

Notably, the size of Pakistan’s economy, measured by nominal GDP, reached Rs106.045 trillion in FY24, reflecting a robust 26.4 per cent increase compared to the previous year. In US Dollar terms, this translates to $374.9 billion.

A significant indicator of economic well-being, per capita income, witnessed a commendable rise of $129, reaching $1680 in FY24.

This represents an 8.3 per cent increase compared to the previous year’s figure of $1,551 and surpasses the ten-year average of $1,626. This upward trajectory is attributed to heightened economic activity and a favorable exchange rate environment.

The investment to GDP ratio, however, experienced a slight dip to 13.14 per cent in FY24, down from 14.13 per cent in FY23. This decline can be attributed to contractionary macroeconomic policies and prevailing political uncertainties. Similarly, the saving to GDP ratio recorded a marginal decrease, standing at 13.0 per cent compared to 13.2 per cent in the previous fiscal year.

The agricultural sector emerged as a key driver of economic growth, registering a remarkable 6.25 per cent expansion in FY24. Notably, this growth is fueled by a robust 16.82 per cent increase in the production of vital crops such as wheat, rice, and cotton.

This surge in agricultural output, the highest in the past 19 years, has significantly contributed to overall economic growth.

In line with this positive momentum, the industrial sector posted a modest growth of 1.21 per cent in FY2024. The manufacturing and construction sectors were particularly noteworthy contributors, recording growth rates of 2.42 per cent and 5.86 per cent respectively.

Meanwhile, the services sector retained its position as the largest contributor to GDP, accounting for 57.7 per cent of the total, with a moderate growth rate of 1.21 per cent.

Despite facing multifaceted challenges including global economic slowdown, high inflation, and flood damages, Pakistan’s economy exhibited resilience and adaptability. Timely and effective policy measures have played a pivotal role in steering the economy towards recovery, despite obstacles such as fiscal consolidation, monetary tightening, geopolitical tensions, and inflationary pressures.

Looking ahead, the outlook for Pakistan’s economy appears promising, with favorable prospects on both domestic and external fronts.

The positive momentum observed across key sectors, coupled with declining inflation and stabilised external conditions, bodes well for sustained economic growth and stability in the upcoming fiscal periods.

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