GDP grew by 2.52%, higher than previous estimates

ISLAMABAD: National Accounts Committee (NAC) released GDP estimates for 4QFY24, showing growth of 3.07% YoY, taking full year (FY24) growth to 2.52%, higher than provisional estimates of 2.38% YoY released by Government on May 21, 2024.

In 4QFY24, Agriculture has shown a growth of 6.76%, industry -3.59% and services 3.69%.Pakistan Economy – SBP reduced policy rate by 200bps.

Agriculture: Growth in Agriculture in 4QFY24 is mainly due to healthy growth in important crops (+26.98%) and low base effect of same quarter last year (-7.93% YoY). On full year basis, agriculture sector growth now stands at 6.36% for FY24, highest % growth in 19 years and also slightly higher than earlier estimates of 6.25% released by NAC.

Industry: Industrial sector declined by 3.59%, while Large scale manufacturing (LSM) witnessed a positive growth of 4.19%. Construction industry declined -0.47%. This takes FY24 decline to 1.15% compared to earlier estimates of +1.21%. Industrial growth for FY24 is revised down significantly on the back of 23% decline in Electricity Gas and Water Supply sector compared to previously estimated declined of 11%. Similarly, construction sector is now projected to show decline of 1.47% compared to previously estimated growth of 5.86% for FY24.

Services: Services sector growth stands at 3.69% backed by 9.04% growth in education followed by information and communication 7.95%, and human health and social work activities 5.86%.  This takes full year FY24 growth to 2.15%, higher than previously shared growth estimates of 1.21%.

The NAC has also marginally revised down the growth rates of FY23 to -0.22% from -0.21% earlier mainly on the back of downward revision in agriculture growth to 2.22% from 2.27% earlier.

Outlook: We expect Pakistan GDP to grow at 2.5-3.0% in FY25 wherein we expect agriculture sector to grow at 1.7% followed by Industrial 2.1% and Services at 3.4%.