Provisional report: Floods, power outages drag growth rate down to 2.4%
Pakistan’s economy grew by a mere 2.4 per cent on the back of the worst floods in its history and crippling power outages.
The provisional growth rate is below the expectations of the International Monetary Fund (IMF), 2.6 per cent less than original government estimates of 4.5 per cent and 0.4 per cent below revised government estimates.
According to the national accounts committee, Pakistan’s Gross Domestic Product (GDP) remained at 2.39 per cent during fiscal year 2010-11 due to end on June 30. Estimates are based on provisional information for six to nine months which is projected over the entire year.
The committee’s data shows that the major push came from the services sector, the industrial sector contracted and the agriculture sector grew nominally.
Net national income grew by just Rs135.9 billion and, with the year’s population growth rate at 2.08 per cent, per capita income would remain virtually unchanged.
Services sector
According to the NAC’s working paper, the services sector grew by 4.1 per cent, owing to a 13.2 per cent growth in the sub-sectors of public administration and defence on account of a 50 per cent rise in salaries. Historically, growth rate of these sub-sectors ranges between three and four per cent. The finance and insurance sub-sector contracted by 6.3 per cent.
Industrial Sector
The industrial sector, which last year grew by 8.3 per cent, shrunk by 0.07 per cent because of massive contraction in electricity, gas and water supply sub-sectors.
Total sales of independent power producers and captive power plants dropped by 8.7 per cent and 17.2 per cent, respectively.
The growth rate of the mining and quarrying sector remained just 0.4 per cent while the manufacturing sector grew by 2.96 per cent. Within the manufacturing sector, large-scale manufacturing sector grew by just 0.98 per cent and the sub-sector of construction, which last
year grew by 28.5 per cent, saw a growth of a mere 0.82 per cent this year.
Agriculture Sector
The agriculture sector, worst hit by previous summer’s floods, grew marginally by 1.21 per cent due to an increase in the production of wheat and sugarcane. However, there was 4.1-per cent contraction in production of major crops such as rice and cotton. Last year, rice production remained at 6.9 million metric tons which dropped to 4.8 million metric tons this year.
The livestock and fishery sectors grew by 3.7 per cent and 1.9 per cent respectively.
2009-10 growth rate
The national accounts committee also revised last year’s growth rate downward to 3.76 per cent from the provisional growth rate of 4.1 per cent. The revision was made because of low growth in agriculture sector last year, which has now been estimated at 0.6 per cent against a provisional figure of two per cent.
Published in The Express Tribune, May 5th, 2011.
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