ISLAMABAD:
Pakistan’s economy grew by 3.2%, which is much below the official target and the required growth rate, leaving at least 1.3 million people jobless this year.
“According to a provisional assessment, gross domestic product (GDP) grew by 3.2% in the financial year 2011-12 ending June 30,” said Sohail Ahmad, Secretary of Statistics Division, after chairing the 91st meeting of the National Accounts Committee, convened to finalise the growth figure.
Estimates are based on provisional information for eight to nine months, which is used for projection for the entire year.
This growth figure remains below the target of 4.2% and even less than the conservative estimates of the International Monetary Fund and the Asian Development Bank that put the growth at 3.6%.
The committee’s data shows that the major push came from commodity producing sectors – agriculture and industry – as the government missed its services growth target with a wide margin.
Net national income increased by Rs282.5 billion and, with the year’s population growth rate at 2.05%, per capita income rose by 1.3%.
“The growth rate is not enough to absorb two million people entering the job market every year,” said Dr Ashfaque Hasan Khan, Dean Business School of NUST. For creating jobs for the new entrants, a 7% to 8% growth was required, but due to the low rate 1.2 to 1.3 million young people remained unemployed this year.
Average growth for the last five years – covering all the period of Pakistan Peoples Party-led coalition government which came to power in March 2008 – stood at just 2.58%. In 2008, the economy grew by 2.2%, in 2009 2.8%, in 2010 1.8% and in 2011 3%, said Arif Cheema, Director General of Pakistan Bureau of Statistics.
Agriculture sector (24.7% of GDP)
The agricultural sector that pushed the overall growth rate up saw a robust growth due to improvement in soil fertility after floods for two years. Against the target of 3.4%, the sector grew by 3.6%.
Targets for major crops and forestry growth were surpassed. Compared to the target of 3%, major crops grew by 6.1% while forestry growth was 4.1% against the target of 2%.
However, production of minor crops dropped 2% against the target of 2% growth. Targets for wheat, sugarcane and rice production were also missed. Against the target of 25 million tons, wheat output was 23.5 million tons.
Rice production stood at 6.2 million tons compared to the target of 6.6 million tons while sugarcane harvest remained at 56.3 million tons against the target of 57.6 million tons.
Industrial sector (22.2% of GDP)
The industrial sector, which rose by 1.9% last year, expanded 3.6% this year because of growth in electricity, gas and water supply sub-sectors. The industrial growth target was 3.2%. Electricity and gas sectors grew by 15.5% against the target of just 1%. “We have added subsidies to the output of electricity generation, which is according to international norms,” said Arif Cheema.
Growth rate for mining and quarrying stood at 1.7% against the target of 1% while the manufacturing sector grew by 2.4% against the target of 3.7%. In the manufacturing sector, large-scale manufacturing rose by just 1.64% while the construction sub-sector, which last year contracted by around 1%, saw a growth of 2.8% this year.
Services sector (53.1% of GDP)
The government missed the services sector growth
target of 5% by a wide margin, as the biggest component of the economy rose by just 2.2% due to contraction in banking and financial sectors.
The finance and insurance sectors contracted by 11%, said Arif Cheema. The growth targets of all sub-sectors, except for ownership and dwellings, were missed.
The National Accounts Committee also revised last year’s growth upwards to 2.96% from the provisional 2.1%.
Published in The Express Tribune, April 27th, 2012.
COMMENTS (14)
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@ ayesha_khan: If you are an Indian as you claim, then I consider your opinion of Musharraf even more biased as a product of Indian media brainwashing.
Almost every article re Pakistan on any website is heavily spammed by hostile commentary based on false propaganda they are fed by the Indian media.
Here's how Alice Albinia sums up Indian media coverage of Pakistan in preface of her book "Empires of the Indus":
"It was April, 2000, almost a year since the war between Pakistan and India over Kargil in Kashmir had ended, and the newspapers which the delivery man threw on to my terace every morning still portrayed Pakistan as a rogue state, governed by military cowboys, inhabited by murderous fundamentalists: the rhetoric had the patina of hysteria."
Others, like Noam Chomsky of MIT, John Briscoe of Harvard and Shekhar Gupta of Indian Express also express similar opinions about how Indian media whip up hatred against Pakistan
http://www.riazhaq.com/2010/11/rulers-and-media-manufacture-consent-in.html
@Riaz Haq:
I am an Indian and not affiliated to any Pakistani political party. The accusation that my opinion was politically motivated is thus unfounded. Secondly, when I say Obama held Pakistan accountable for the aid, I do not mean in the corruption/governance sense. I mean it in the sense that it required some action against establishment "assets" which resulted in a backlash. I have no desire to defend PPP's corruption. Just wanted to provide some context to Musharraf's so called achievements. One more fact, several scholars have challenged the integrity of statistics published by the Musharraf regime. So I do not give too much credence to any references to government data published during his economic stewardship - unless it was validated by the subsequent government.
@Meekal Ahmed:
Sir I am a huge fan of your writing. I find your opinions fact based, unbiased and internally consistent, also reflecting clearly your deep expertise in the area of developmental economics.
I stand corrected on the inflation. But I imagine that the higher inflation rate you stated supports rather than contradicts the spirit of my earlier post. Would you agree?
@Riaz Haq: I know about today's generations and yes economic prosperity of people is the most important aspect and it may be not for you thats why voters like not be cared by your politicians and so this the reason that such a bad economic data has come up. There are times that economy f kashmire is not as prosperous as of know because kashmire has seen 3 wars and 20 years continuous militancy. Now militants has lostttttttt the war which is sometimes ago explained by bhutto of 1000 year war with india; now it is growning rapidly.
@ayesha_khan:
You make some valid points.
By the way, inflation had not hit the teens. It was 27% (driven by food and oil prices but also excess domestic demand) and came down to 9.8% in the first flush of the GOP-IMF program. That is called ajdustment.
Then came the floods.......
@ayesha_khan:
Politically motivated denial of facts doesn't change the facts. Less accountability of aid should have produced lower, not higher growth during Musharraf years. Meanwhile the amount of aid and loans to Pakistan have dramatically increased since 2008.
The real problem for poor economic performance under PPP is incompetence and graft. Even TI confirms that corruption in Pakistan has reached new heights since 2008. One example is Pak Steel mill which was profitable under Musharraf is now bleeding billions in losses and operating well below capacity.
Education spending reached nearly 3% of GDP under Musharraf is now down to 1.5%. while subsidies to PIA,PSM and Pepco exceed the education budget now.
http://www.riazhaq.com/2012/02/save-pakistans-education-airline.html
@hgkjsk: Are you suggesting that higher GDP growth is the key criterion for Kashmiris or any other people to decide which country to join? By this logic, people of Indian occupied Kashmir should have joined Pakistan long ago because Pakistan's GDP has grown faster than India's for the bulk of the period since 1947.
http://www.riazhaq.com/2010/09/brief-history-of-pakistani-economy-1947.html
Even USA is growing faster than Pakistan.
June 30 is 70 days away ...
@hgkjsk: till 2015 the energy crisis will not end
indian occupied kashmire growth rate is 9 percent. so thats why people there want to be with india not to be with the pliticians who are responsible for effecting and giving them fear of hunger every year; more than a millian people are adding to these poor people.
Economy of punjab was badly affected due to alll power being diverted to sind.
It's a story of corruption & incompetence of Pakistan's political class. What we're seeing now is reminiscent of the bad old days of 1990s when the two major parties, PPP & PML(N), gave us the lost decade. If it wasn't for the Musharraf years from 2000-2007 which saw Pakistan's GDP more than double in a few years, Pakistanis would be in much worse shape economically than they are now.
http://www.riazhaq.com/2008/08/musharrafs-economic-legacy.html