Pakistan Misses Growth Target, Reports 2.38% GDP Growth for FY 2023-24

Pakistan missed its growth target for FY 2023-24, achieving a GDP growth of 2.38% against the targeted 3.5%. This was disclosed in the Economic Survey by Finance Minister Muhammad Aurangzeb. Agriculture outshined with 6.25% growth, with industries and services lagging. Fiscal and trade deficits remained at previous levels.

Pakistan has fallen short of its growth target for the financial year 2023-24, achieving a GDP growth rate of 2.38 per cent compared to the targeted 3.5 per cent, as acknowledged by the government on Tuesday.

The Economic Survey of Pakistan 2023-24, a pre-budget document outlining the country's main socio-economic achievements for the fiscal year, was presented by Finance Minister Muhammad Aurangzeb at a press conference.

"The real GDP growth was recorded at 2.38 per cent for FY 2024," the document stated, highlighting that a combination of prudent policy management and gradual economic recovery turned previous year's negative growth into a positive one.

Despite the positive trend, the growth was below the estimated target primarily due to the underperformance of the industrial and services sectors.

However, agriculture surpassed expectations, registering 6.25 per cent growth against a target of 3.5 per cent, marking the highest sectoral growth in the past 19 years, according to Aurangzeb. The industrial and services sectors showed respective growths of 1.21 per cent, failing to meet their targets.

The fiscal deficit for the year matched last year's figure at 3.7 per cent, while the trade deficit stood at 4.2 per cent. Revenue collection from July to March amounted to Rs 9.79 trillion, including Rs 7.26 trillion in tax revenues and Rs 2.52 trillion in non-tax revenues.

The survey showed a reduction in inflation to 11.8 per cent by FY 2024, attributed to the gradual easing of prolonged inflationary pressures. The GDP at current market prices rose to Rs.106,045 billion, showing a 26.4 per cent increase from last year.

Per capita income increased to USD 1,680 from last year's USD 1,551, driven by enhanced economic activity and exchange rate appreciation. The investment to GDP ratio was recorded at 13.14 per cent, down from 14.13 per cent in FY 2023, mainly due to contractionary policies and political uncertainty. The saving to GDP ratio slightly decreased to 13.0 per cent.

Aurangzeb reaffirmed the government's commitment to privatizing loss-making state-owned enterprises, including Pakistan International Airlines, ahead of the national budget announcement on June 12.

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