Pakistan’s high economic growth rate: sector wise performance at a glance
If we talking about the Pakistan government's latest released economic figures about country’s performance in 2017, there have been tremendous results for Pakistan's economic growth. According to the figures released on 9th April, Pakistan's economy is growing at a rate of 5.7 per cent in financial year 2017-18. This is the fastest increase in the last 11 years, but it is less than the 6 percent growth rate projected by the Pakistan government. Although there is still some time remaining at the end of the current financial year (Pakistan's financial year starts from the first date of July every year.)
The calculation of data has remained incomplete. In the meeting of Pakistan’s National Accounts Committee (NAC), only 15 out of 20 key growth indicators were found to be on target. The growth rate, however, is provisional as final numbers for the full year will firm up later.
According to these provisional data, per capita income calculates to Rs180,204 for 2017-18, higher than Rs162,230 figure for Financial year 2017 from Population Census 2017 held in March last year.
Agriculture sector plays an important role in the economy of Pakistan and its performance has a significant impact on the pace of Pakistan's economy. The agriculture sector witnessed growth of 3.81pc, exceeding its target of 3.5pc in the outgoing fiscal year.
Important crops went up by 3.57pc against the target of 2pc with growth in the production of rice, sugarcane and cotton is estimated to be 8.7pc, 7.4pc, and 11.8pc, respectively. Decline in production has been estimated in wheat and maize at 4.4pc and 7.1pc, respectively.
Livestock, the second largest sub-sector of agriculture registered a growth of 3.76pc against the target of 3.8. At the same time, it is becoming a major cause of scarcity of drinking water in Pakistan. The fishery sector expanded 1.63pc against 1.7pc last year while forestry grew 7.17pc versus the target of 10pc, reflecting the last year’s trend. These products of Pakistan are being exported to China, but it is still less than India’s export.
In Pakistan, Textiles, Steel and Sugar are the main production activity. The industrial sector posted a growth of 5.8pc compared to the benchmark set at 7.3pc in 2017-18 while in FY17, it grew by 5.43pc. The mining and quarrying sector recorded growth of 3.04pc against the target of 3.5pc.
Manufacturing recorded growth of 6.13pc against the target of 6.4pc, higher than the 5.82pc last year. Large-scale manufacturing was up 6.13pc against the target of 6.3pc. Small-scale manufacturing expanded 6.13pc against the target of 8.2pc while slaughtering grew 8.18pc against the target of 3.7pc.
Major contributors to this growth were cement at 12pc, tractors 44.7pc, trucks 24.41pc and petroleum products 10.26pc. Electricity and gas sub sector was up 1.84pc and the construction activity 9.13pc.
Growth in the construction sector was 9.13pc compared to 9.84pc last year, missing its target at 12.1pc for the outgoing fiscal year. Supply of electricity and gas also depicted an increase of 1.84pc against the bar at 12.5pc. The electricity and gas sub-sector, however, showed low growth due to reduced subsidies for K-Electric and Wapda and its companies.
Pakistan's service sector has not been developed comparatively .The services sector grew 6.43pc in 2017-18 against the benchmark of 6.4pc while last year, it expanded by 6.46pc. Major contributors were the general government services, which rose 11.42pc against the target of 7pc. It was mainly driven by the increase in salaries and inflation. Other private services also contributed positively.
Finance and insurance increased by 6.13pc against the target of 9.5pc, housing services by 4pc against 3.9pc, transport, storage and communication 3.58pc against 5.1pc.
Wholesale and retail trade sector grew at a rate of 7.51pc against the target of 7.2pc. It is dependent on the output of agriculture and manufacturing and imports. Agriculture increased by 3.81pc, manufacturing increased by 5.80pc and imports increased by 17pc.
In this economic development of Pakistan, there has also been a positive effect due to the large scale activities because of CPEC. But this is a temporary factor. Due to the poor financial condition of its close economic partners like Saudi Arabia and the United Arab Emirates the influx of money coming from there has reduced, and the flow of large-scale money coming from China on the other hand is in debt form. And it can work as an instantaneous stimulant for the economy, but once it is fully operational, it can badly affect the manufacturing and services sectors of Pakistan.
Data Source- National Accounts Committee (NAC) of Pakistan and Dawn