Pakistan’s economy has fallen short of its 4.2% growth target in the first half of the current fiscal year, raising concerns about overall performance. Officials, however, remain hopeful of meeting the annual target despite global uncertainties.
The National Accounts Committee has approved the economic performance figures for the ongoing fiscal year, confirming that the 4.2% annual growth target was not achieved in the first half.
Economic growth remained below expectations, reflecting challenges in key sectors of the economy.
According to the report, the growth rate for the first quarter was revised downward from 3.71% to 3.63%, and later recorded at around 3.6%. The slowdown was primarily attributed to weaker-than-expected performance in the agriculture and industrial sectors.
Agriculture and industry underperform
The agriculture sector’s growth was revised down from 2.89% to 2.72%, highlighting challenges in farm output. Similarly, industrial growth dropped from 9.38% to 8.86%, contributing to the overall economic slowdown.
However, the services sector showed slight improvement, with growth rising from 2.35% to 2.44%.
Economic activity picked up slightly in the second quarter, with growth recorded at 3.89%, or approximately 3.9%. This improvement was largely driven by better performance in the industrial sector, which grew by 7.40%.
During the same period, the agriculture sector recorded growth of 1.76%, while the services sector expanded by 3.69%.
Growth still below recent highs
Despite the improvement, overall economic growth remains modest. Over the past two years, the maximum growth rate recorded has been around 3%. This indicates that the economy is still struggling to regain stronger momentum.
Officials from the Ministry of Finance and the State Bank remain confident that the 4.2% growth target can still be achieved by the end of the current fiscal year. They believe improved performance in key sectors in the coming months could help bridge the gap.
Global risks may impact outlook
However, international financial institutions, including the IMF and the World Bank, have cautioned that global economic conditions could affect growth.
They noted that the ongoing Middle East war may impact economies worldwide, including Pakistan’s, potentially posing additional challenges.
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