Engineering Post Report
Financial year 2023-24 has entered its second half and one can have an outlook on the economic situation as viewed by the experts on being contacted.
The economy of Pakistan is by and large envisaged to grow on the whole by 3.5 percent during the ongoing financial year by end June 2024 with projections of 35 percent for agriculture sector, 3.4 percent for industrial sector and 3.6 percent for services sector. However, the revival of growth was dependent on political and macroeconomic stability as the country is going to the general polls on February 08, 2024 if all goes well, external account improvement, supportive monetary and fiscal policies and expected fall in the global oil and commodity prices.
The industrial sector was most likely expected to recover during the ongoing financial year by the time it ends as demand and shocks were expected to dissipate considerably. It has been expected by the experts that the industrial sector will grow by 3.4 percent with Large Scale Manufacturing (LSM) at 3.2 percent, , mining and quarrying 1.2 percent, small and household manufacturing 8.8 percent, electricity generation and gas distribution 2.2 percent and construction only by 1.5 percent.
Industrial sector was on the whole expected to get a boost from improved inputs and energy supplies on the back of anticipated fall in global oil and commodity prices, public sector expenditure and mega projects for industrial development.
However, there were downside risks as well of high interest rates and exchange rate uncertainties which may raise the costs of working capital and raw material. Similarly, construction in the housing sector and infrastructure projects was also likely to be affected somewhat adversely by higher prices of construction material.
Services sector was also expected to accelerate its growth to 3.6 percent during the ongoing financial year. The envisaged growth in the commodity pricing sectors was also likely to complement the targeted growth in the services sector. Uptick in the economic activity in the manufacturing and agriculture sectors was expected to translate into increased growth in the wholesale and retail trade and transport, storage and communications sectors/sub-sectors. Moreover, the tourism industry was also expected to gain momentum and generate socio-economic dividends that will hopefully l have a trickledown effect on retail trade, hotels and restaurants in the country by and ;large.
Furthermore, investment to Gross Domestic Product (GDP) was also expected to marginally increase from 13.6 percent in 2022-23 to 15.1 percent during the year under report here hopefully due to stabilization and political activity. Fixed investment was expected to grow by 40.4 percent on nominal basis whereas as a percentage of GDP, it was expected to increase to 13.4 percent during the current financial 2023-24 as compared to 11.9 percent in 2022-23. National savings rate was targeted at 13.4 percent of GDP, the experts concluded.