Experts believe some of the growth can be attributed to the low base it stood at last year due to the COVID-19 pandemic
Prime Minister Imran Khan on Friday announced that Pakistan’s gross domestic product (GDP) was estimated to have grown by 3.94 percent during fiscal 2020-21, significantly better than had been predicted by global lenders or the State Bank of Pakistan.
“National Accounts Committee has finalized GDP growth estimate and GDP growth is estimated at 3.94%,” Khan said in a posting on Twitter. “This reflects the success of our government’s economic policies while managing the COVID 19 pandemic,” he said, adding that the “v-shaped recovery” was “balanced” between agriculture, industry and services.
Energy Minister Hammad Azhar credited the GDP growth to industry. “This is a remarkable recovery and unlike past growth stints, forex reserves have also grown and the current account remains in surplus,” he added.
The growth estimate is a pleasant surprise for observers, as the State Bank of Pakistan had predicted GDP growth at 3 percent, while the Finance Ministry’s projection was closer to 2.1 percent. Global lenders International Monetary Fund and the World Bank had estimated the FY20-21 growth to fall between 1.3 and 1.5 percent.
Experts believe some of the growth can be attributed to the very low base it stood at last year, especially with the global economy contracting due to the shutdowns necessitated by the COVID-19 pandemic. Meanwhile, the National Accounts Committee reported that the services sector had witnessed a 4.43 percent economic growth in the outgoing fiscal; the agriculture sector 2.77 percent saw growth; and industrial output grew by 3.57 percent.
According to the NAC, the country’s GDP has grown to Rs. 47.709 trillion for 2020-21, compared to Rs. 41.556 trillion the previous year, a growth of 14.8 percent. It noted that the size of the economy had grown in dollar terms—going from $263 billion in 2019-20 to $296 billion in 2020-21, the highest single-year increase ever—due to the rupee strengthening against the U.S. currency.
Government officials, on the condition of anonymity, said some additional factors that could have led to the GDP growth might be higher production of wheat, and large scale manufacturing growth.