Islamabad, January 4
Pakistan's reported 3.7% economic growth for the first quarter of the current fiscal year has come under sharp scrutiny, with an independent think tank dismissing the figure as a paper-based outcome driven by flawed methodology rather than real economic expansion, as reported by The Express Tribune.
According to The Express Tribune, in a critical brief, the Economic Policy and Business Development (EPBD) think tank argued that the growth approved by the National Accounts Committee (NAC) reflects "methodological artefacts, deflator manipulation and import-led assembly activity," instead of genuine gains in productive capacity.
The forum said the data presents an illusion of recovery while business activity, manufacturing output and exports remain under pressure. EPBD pointed to glaring contradictions between domestic growth claims and trade indicators. Food exports fell sharply by 25.8% during the quarter, while food imports surged by 18.8%, yet agriculture and food manufacturing were reported to have expanded.
Cotton production declined, ginning dropped by over 12%, and cotton-based exports fell around 10%. However, textile exports still rose largely due to increased use of imported synthetic fibres rather than domestic raw material strength.
The think tank also questioned the headline 9.4% industrial growth, attributing it largely to accounting adjustments. Electricity, gas and water supply recorded over 25% growth, which EPBD said was fuelled by subsidies jumping from Pakistani Rupees (PKR) 20 billion to PKR 118 billion, not by higher output. Construction increased by 21% despite cement production rising by only 15%, while transport-related imports more than doubled, including an extraordinary spike in bus and truck imports.
EPBD explained that declining intermediate consumption mechanically inflated gross value added, making growth appear stronger on paper without corresponding increases in production. Agriculture, it said, grew 2.9% despite flood impacts, stagnant crop output and the absence of a wheat harvest in the first quarter, as cited by The Express Tribune.
While Pakistani Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb have welcomed the growth figure as a sign of economic acceleration, EPBD warned that Pakistan's manufacturing and export sectors continue to suffer from high interest rates, heavy taxation, expensive energy and inconsistent policies.
Imports rose 11% in the first half of the year. In comparison, exports declined nearly 9%, reinforcing concerns that the economy is being propped up by consumption and imports rather than sustainable, private-sector-led growth, as reported by The Express Tribune.
- ANI
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