Pakistan’s economy showed promising signs of recovery with a 2.09% growth in GDP for the third quarter of the financial year 2023-2024, driven primarily by robust agricultural output, according to the Pakistan Bureau of Statistics (PBS). This marks a significant improvement from the previous fiscal year, which saw a contraction of 0.21% due to various economic challenges.
Projected Annual Growth
The PBS has projected a provisional GDP growth rate of 2.38% for the entire financial year ending June 2024. This forecast aligns closely with the State Bank of Pakistan‘s recent projection, which estimated a real GDP growth of between 2-3% for the fiscal year 2024.
Impact of Agricultural Sector
The agricultural sector has played a pivotal role in this economic resurgence, with an estimated growth of 6.25%. The PBS attributes this substantial increase to double-digit growth in key crops such as wheat, cotton, and rice. These bumper crops have significantly contributed to the positive economic outcome.
Revised Quarterly Estimates
The PBS has also revised its GDP estimates for the first and second quarters of the financial year 2023-2024. The first quarter’s growth has been adjusted to 2.71% from an earlier estimate of 2.5%, while the second quarter’s growth has been revised to 1.79% from 1%.
Historical Context and IMF Compliance
There are no comparable year-ago third-quarter GDP figures since Pakistan only began releasing quarterly growth data from November 2023. This move was part of the structural benchmarks set by the International Monetary Fund (IMF) under a $3 billion bailout program, which was completed last month.
Industrial and Service Sectors
The industrial and services sectors have also contributed to the economic growth, each recording a 1.21% increase. Although these sectors have shown moderate growth compared to agriculture, their positive performance is essential for overall economic stability.
Current Account Surplus
In addition to GDP growth, Pakistan recorded a current account surplus of $491 million in April 2024. The central bank highlighted that the current account deficit from July to April has significantly improved, shrinking to $0.2 billion from $3.9 billion during the same period last year.
Pakistan’s economic growth in the third quarter of the financial year 2023-2024 is a positive indicator of recovery, driven mainly by the agricultural sector. With revised growth estimates and a favorable current account balance, the country is on a path towards economic stability and resilience.