Govt revises upwards 2020-21 GDP growth rate estimate to 5.37pc from 3.9pc

ISLAMABAD – The PTI government has revised upwards Pakistan’s gross domestic product (GDP) growth rate estimate for fiscal year 2020-21 to 5.37 per cent from the earlier estimate of 3.9 per cent.

The National Accounts Committee, in a meeting, has also changed the economy’s baseline, from 2005-06 to 2015-16, which has increased the country’s GDP to Rs 36.490 trillion in FY21 from Rs 13.226 trillion, during the same period, on the basis of previous base. As per the NAC decision, the per capita income increased to Rs 266,614 ($ 1,666) in 2020-21, while the size of the country’s economy reached $ 346.76 billion.

The 104th meeting of the National Accounts Committee to review the change of base of national accounts from 2005-06 to 2015-16 was held with Secretary Ministry of Planning, Development Special Initiatives Abdul Aziz Uqaili, in the chair.

On the basis of 2005-06 economic baseline, on constant prices the country’s GDP was Rs 11.117 trillion in 2015-16, Rs 11.697 trillion in FY2016-17, Rs 12.344 trillion in 2017-18, Rs 12.601 trillion in 2018-19, Rs 12.552 trillion in 2019-20 and Rs 13.226 trillion in 2020-21. However, after changing the economy to new baseline the GDP increased to Rs 30.508 trillion in 2015-16, Rs 31.914 trillion in 2016-17, Rs 33.860 trillion in 2017-18, Rs 34.916 trillion in 2018-19, Rs 34.566  trillion in 2019-20 and Rs 36.490 trillion in 2020-21.

The NAC endorsed that during FY 2017-18 the highest GDP growth of 6.1pc, of the past 14 years, was achieved by the PML(N) government. On the basis of previous economy baseline the GDP growth during FY21 increased to 5.37pc against the provisional estimates of 3.94pc, however the revision of the baseline to 2015-16 has pushed the growth to 5.57pc.

“NAC approved revised estimate of GDP growth for 2020-21. The growth in 2020-21 was 5.37%. This is the 2nd highest growth in last 14 years. Higher growth versus provisional estimates which were based on Jul-Mar numbers, was mainly due to very strong industrial growth in Apr-Jun,” said Federal Minister for Planning, Development Special Initiatives Asad Umar in a tweet.

Due to improved coverage and better estimation of input output structure of industries, the gross value addition has increased by Rs. 3.1 trillion in the base year 2015-16 from Rs. 27.4 trillion to Rs. 30.5 trillion, showing an increase of 11.3% in the Gross Value Added (GVA) for the base year 2015-16. This shows that in the previous base of 2005-06 economy was under estimated by 11.3%. Agriculture showed an increase of 8.3% from Rs. 6.7 to 7.3 trillion, industry grew by 11.9% from Rs. 5.3 to 5.9 trillion and services enhanced by 12.5% from Rs. 15.3 to 17.3 trillion, said a statement issued after the NAC meeting. 

With rebasing and level shift of economy from Rs. 29.1 trillion to Rs. 32.7 trillion in 2015-16, the GDP at market prices increased to 55.5 trillion in 2021, and gross national income increased to Rs. 59.3 trillion. With rebasing, some key economic indicators such as debt to GDP in terms of percentage GDP improved, however, the revenue to-GDP ratio reduced. It is worth mentioning here that the last rebasing of national accounts was done in 2005-6 and it was decided that the rebasing exercise would be done after every five years. However the new rebasing was done after 15 years.

In line with the best practice adopted by the most of the countries of the world, the Ministry of Planning, Development and Special Initiatives and Pakistan Bureau of Statistics (PBS) have decided to devise a mechanism to rebase national accounts as well as price statistics, after every five years, as both go in tandem to capture more areas and activities, which have taken place in the last couple of years, the statement said.

Article source: https://nation.com.pk/21-Jan-2022/govt-revises-upwards-2020-21-gdp-growth-rate-estimate-to-5-37pc-from-3-9pc