The gross domestic product (GDP) posted a growth of 0.29 per cent in the fiscal year 2022-23 as the economy faced tremendous challenges of macroeconomic imbalances, supply shocks, and international economic slowdown.
According to the Pakistan Economic Survey 2022-23, floods engulfed a large part of agricultural land in the first quarter of the fiscal year 2023 and disrupted the domestic supply.
The country suffered flood damages to the tune of Rs. 3.2 trillion, the GDP loss clocked in at Rs3.3 trillion while the rehabilitation expenditures came at Rs3.5 trillion, the report showed.
The increase in international prices and currency depreciation which led to an increase in domestic commodity prices has reduced the aggregate demand in the fiscal year 2023.
The per capita income stood at $1,568 during the outgoing fiscal year, compared with $1,765 in the last year on account of currency depreciation, lower GDP growth, and rising population.
The investment to GDP ratio also declined as it stood at 13.6 per cent in the fiscal year 2023 compared with 15.6 per cent during the last fiscal year, due to a slowdown in global and domestic economic activity and contractionary macroeconomic policies.
On the flip side, the growth of the agriculture sector has been estimated at 1.55 per cent in the fiscal year 2023 despite the devastating impact of flash floods. This growth is mainly driven by some main crops of wheat, sugarcane, and maize and livestock.
The industrial sector, however, posted a negative growth of 2.94 per cent in the fiscal year 2023. The sector’s performance is more dependent on the manufacturing sector which has a share of 65.0 per cent in the industry, the report stated.
“Apart from external shocks, Pakistan’s economy is also confronted with multiple domestic shocks. Flood damages have resulted in losses for the cotton industry which constitutes half of the industry’s required cotton input, it added.
The State Bank of Pakistan’s restrictive policies to correct the balance of payment crisis and control inflation, such as high interest rates and import restrictions have created headwinds for business and consumer confidence, as well as investment.
The Large Scale Manufacturing (LSM) growth during the first nine months of the fiscal year 2023 declined 8.11 per cent as compared to the growth of 10.6 per cent in the same period last year.