The Pakistan Economic Survey, shedding light on the economic gains and losses during the outgoing fiscal year 2023-24 (FY24), will be released tomorrow (Tuesday).
The economic growth fell short of the target, standing at 2.38% compared to the projected 3.5% while average inflation exceeded estimates of 21%, reaching 23.2%.
In FY24 to date, the government faced significant challenges in meeting crucial economic targets. Economic development, industrial growth, inflation, agriculture, and electricity production have all fallen short of expectations.
After the State Bank of Pakistan raised the key interest rate to 22 percent earlier this fiscal year, the federal government hopelessly failed to meet the inflation reduction target. Inflation spiked to 26 percent compared to the target of 21 percent. Resultantly, economic growth is estimated at 2.4 percent, below the target of 3.5 percent.
The agricultural sector saw mixed results. While the growth rate was 6 percent, surpassing the target of 3.5 percent, major crop production exceeded expectations at over 11 percent against a 3 percent target.
Livestock met expectations at 3.9 percent growth, while production by fisheries lagged behind at 0.8 percent against a 3 percent target.
The industrial sector took one on the chin this fiscal year with overall output at 1.2 percent, well below the pre-determined target of 3.4 percent. The manufacturing sector’s output was 2.4 percent, while growth in the services sector was only 1.2 percent.
The import bill for goods is expected to be limited to $55 billion, lower than the $58 billion target. The export target of $30 billion will likely be achieved, leading to a trade deficit of $25 billion, much better than compared to a target of $28 billion.
The survey highlights notable achievements in various sectors, such as per capita income, remittances, exports, and tax revenue. The agriculture sector performed well, surpassing the target of 3.4% to a growth rate of 4%, particularly in staple crop production, which recorded a significant improvement of 16.8% as opposed to the target of 3%. Major crops such as wheat, rice, and corn saw impressive increases in production.
The industrial sector struggled to meet targets, with industrial growth at only 1.2% against the targeted 3.4%. Manufacturing also fell short, achieving 2.4% compared to the 4.3% target. Similarly, the performance of major industries was 0.1% against the target of 3.2%, while the services sector saw modest growth of 1.2%, below the targeted 3.6%.
Certain industries, such as real estate, education, health, housing, and food showed better performance but the targets of electricity, gas, wholesale, retail, transport sectors, financial, insurance, communication and national savings were not met.
On the external front, the trade deficit remained a concern, with imports exceeding exports by a significant margin.
Remittances and exports remained below their annual targets, while imports exceeded expectations, contributing to a widening trade deficit. The annual remittances target was $30.53 billion, which remained at $27 billion in the 11 months of the ongoing fiscal year. Annual exports remained at $28 billion in 11 months, against the target of $30 billion.
The current account deficit reached $202 million in 10 months against the annual target of $6 billion, indicating ongoing challenges in maintaining a balanced external account. The imports failed to achieve the target of $58.69 billion and remained $49.80 billion.