Finance Minister Muhammad Aurangzeb on Tuesday unveiled the Economic Survey of Pakistan 2023-24 and said that Pakistan has recorded a real gross domestic product (GDP) growth of 2.38 percent in FY2024, up from the envisaged target of 2pc.
Addressing a presser at the launching ceremony of the Economic Survey of Pakistan 2023-24 in Islamabad, the Federal Minister for Finance said that despite challenges, the country had made significant progress in achieving macroeconomic stability, with a remarkable 30 percent growth in revenue collection, a reduced current account deficit, reduction in inflation and a stable currency.
He said that the robust growth in agriculture sector, the highest in last 19 years emerged as the key driver of economic growth in FY2024. The prolonged inflationary impact is gradually fading in FY2024. The inflation is trending downward steadily since third quarter of FY2024. This improvement is picking up the aggregate demand along with the resilient external sector and fiscal consolidation, he added.
The minister highlighted the significant reduction in the current account deficit, from an estimated $6bn to around $200m. Aurangzeb said in the three months of 2024, the country experienced a current account surplus. tuation indicated a remarkable turnaround from a precarious economic situation, characterized by a 0.2percent GDP contraction, 29percent rupee depreciation, and shrinking foreign exchange reserves, which had declined to just two weeks’ worth of import cover.
Aurangzaib said that despite challenges in the large-scale manufacturing (LSM) sector due to interest rates and energy issues, the country’s GDP growth had found a silver lining in the agriculture sector, which had been boosted by bumper crops.
He said that the agriculture, dairy, and livestock sectors are expected to remain a key driver of growth in the years to come.
According to the the Economic Survey, GDP at current market prices increased to Rs106,045 billion in FY2024, showing a growth of 26.4 percent over (Rs.83,875 billion) last year. Per capita income increased by US$129 to US$1680 as compared to US$1,551 of last year on the account of increase in economic activity and appreciation in the exchange rate.
The investment to GDP ratio stood at 13.14 percent in FY2024 compared to 14.13 percent in FY2023 mainly due to contractionary macroeconomic policies and political uncertainty. The saving to GDP ratio recorded at 13.0 percent in FY2024 compared to 13.2% in FY2023. The growth of agriculture sector estimated at 6.25 percent in FY2024. This growth is mainly driven by 16.82 percent growth in important crops such as wheat, rice and cotton.
The industrial sector posted a positive growth of 1.21 percent in FY2024. Industrial sector performance is mainly driven by the manufacturing sector (2.42%) and construction sector (5.86%). Services sector constitutes the largest share of 57.7 percent in GDP for FY2024. This sector also witnessed a moderate growth of 1.21 percent.
The agriculture sector in Pakistan witnessed robust growth in FY2024, with an overall increase of 6.25 percent. Manufacturing activity started to recover in FY2024, but still remained below the potential due to weak market sentiments, global supply disruptions, and heavy reliance on imports. Large Scale Manufacturing (LSM) declined by 0.1 percent during Jul-Mar FY2024 compared to decline of 7.0 percent last year.
In FY2024, the consolidation measures boosted revenues, however, expenditure remained under pressure due to higher markup payments. The fiscal deficit stood at 3.7 percent of GDP during July-March FY2024 the same as last year. An amount of Rs 25.3 billion allocated to health sector in PSDP of FY2024. During the period July-May FY2024 68% of the allocation has been released to concerned authorities. The total public health expenditures during FY2023 amounted to Rs 843.2 billion (1.0 % of GDP) against Rs 919.4 billion last year.
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