Following alterations to economy’s baseline, government claims massive boost to GDP for fiscal year 2020-21
Pakistan on Thursday revised up its economic growth rate—for the second time—from 3.9% to 5.37%, with Energy Minister Hammad Azhar hailing the “positive indicators” of the national economy.
Crediting strong industrial growth for the upward revisions, the minister claimed the Pakistan Tehreek-e-Insaf (PTI)-led government had achieved growth “at a lesser cost” than the previous government of Pakistan Muslim League (Nawaz).
The revised rates were approved by the 104th meeting of the National Accounts Committee following a rebasing of the economy to 2015-16 from the previous 2005-06. As a result, GDP growth improved from 3.9% to 5.37%, while the economy rose to $346.76 billion from the previous estimate of $296 billion.
The NAC claimed that the size of the economy had grown in dollar terms as the rupee strengthened against the greenback. It also re-calculated per capita income to Rs. 266,614, up from Rs. 246,414. The per capita income in dollar terms has similarly jumped to $1,666 from earlier projections of $1,543 during FY20-21.
According to Azhar, growth for agriculture was reported at 3.48%; industry at 7.79%; and services at 5.7% on the basis of the rebased GDP. While acknowledging the impact of ongoing inflation on the salaried class, he said it had been “balanced” by major earnings in the agriculture and industrial sectors. He reiterated claims that the government would consider additional steps to minimize the impact of inflation on the middle class.
The minister said that the “prudent” economic policies of the government had allowed it to reduce the circular debt by Rs. 130 billion annually, adding that gross value addition had increased by Rs. 3.1 trillion in the base year 2015-16 from Rs. 27.4 to Rs. 30.5 trillion, showing an increase of 11.3%, which suggested the previous base of 2005-06 economy was underestimated.
Following the rebasing, the GDP has increased to Rs. 55.5 trillion, while the gross national income has increased to Rs. 59.3 trillion.
Hailing the development, Planning Minister Asad Umar claimed it was the second-highest growth witnessed in 14 years. In a posting on Twitter, he claimed it was mainly due to strong industrial growth between April and June.