Pakistan’s economy experienced sluggish growth of just 0.92% during the first quarter of the fiscal year 2024-25 (1QFY25), as reported by the Pakistan Bureau of Statistics. The growth breakdown reveals that the agriculture sector expanded by 1.15%, the services sector grew by 1.43%, and the industrial sector contracted by 1.03%. These figures highlight ongoing challenges across various sectors, impacting the overall economic landscape.
The updated data also provides insights into the overall size of the economy and per capita income. Pakistan’s economy is now valued at Rs. 105.6 trillion, or approximately US$ 373.3 billion, with a per capita income of Rs. 472,263 (US$ 1,669). These numbers are subject to further revision as projections based on the 2023 Population Census are integrated.
Agriculture showed a mixed performance in Q1 FY25. While the overall growth in agriculture stood at 6.18%, it declined slightly from 6.36% due to a downward revision in forestry, which shifted from positive growth of 3.05% to a contraction of -0.89%, driven by reduced timber production. Crops, a significant contributor to agriculture, contracted by 5.93%, with important crops declining by 11.19%. Key reasons for this drop include reduced production of cotton (-29.6%), maize (-15.6%), rice (-1.2%), and sugarcane (-2.2%). Wheat had no impact in Q1 as its lifecycle does not align with this quarter. However, other crops posted positive growth of 2.08%, bouncing back from a decline of -2.08% in Q1 last year. Livestock performed relatively well, growing by 4.89%, driven by increased production and reduced input costs such as dry fodder.
The industrial sector faced substantial challenges, with a contraction of 1.03%, reflecting a slowdown compared to Q1 last year. The mining and quarrying industry saw a sharp decline of 6.49%, primarily due to reduced production of coal (-12.4%), gas (-6.7%), and crude oil (-19.8%). Similarly, the construction industry contracted significantly by 14.91%, influenced by a drop in cement production (-16.12%), a critical input. Large-scale manufacturing (LSM), as indicated by the Quantum Index of Manufacturing (QIM), also decreased by 0.82%, while the electricity, gas, and water supply sector showed modest growth of 0.58%.
The services sector, a vital part of the economy, grew by 1.43%, albeit slower than the 2.16% growth in the same quarter last year. Positive contributions came from wholesale and retail trade (0.51%), accommodation and food services (4.58%), information and communication (5.09%), real estate activities (4.22%), education (2.03%), human health and social work activities (5.60%), and other private services (3.30%). However, transportation and storage contracted by 0.07%, and public administration and social security declined by 4.49%, offsetting some of the sector’s gains.
The government revised GDP growth for FY24 slightly downward from 2.52% to 2.5%, reflecting updated economic realities. The broader economy faces headwinds, including reduced agricultural outputs, declines in industrial performance, and slowdowns in key service sectors.
While the data reveals areas of concern, it also highlights potential avenues for recovery and growth. For instance, improved performance in livestock, positive trends in certain service industries like information and communication, and growth in health and education sectors suggest resilience in parts of the economy. Policymakers must focus on stabilizing industries like construction and mining while addressing the challenges in agriculture to foster sustainable growth in the coming quarters.
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