Pakistan economy stagnates: 2nd year at 2.4% growth, inflation hits 26%

ISLAMABAD, May 22: Pakistan's economy has stagnated for the second year in a row, with growth of only 2.4%. Inflation has soared to 26%, pushing millions into poverty.
The National Accounts Committee (NAC) met on Wednesday to discuss the state of the economy. The meeting was chaired by the Secretary of the Ministry of Planning, Owais Manzoor Samra.
According to media reports, the International Monetary Fund (IMF) had predicted even lower growth of 1.8% for the current fiscal year. The economy shrank by 0.21% in the last financial year.
There has been some improvement in the agricultural sector, which grew by 6.3% thanks to good harvests. However, the industrial and services sectors have continued to struggle.
Industrial growth was just 1.21%, with the exception of large industries which performed poorly. Large industries are a major source of tax revenue and employment.
The electricity, gas and water supply sectors shrank by 11%. This is likely due to a decrease in electricity consumption caused by high prices.
The construction sector also saw a slowdown, with growth of 5.9% compared to 9% last year.
The services sector grew by 1.21%. Growth was mixed within the sector, with some areas like wholesale and retail trade (0.3% growth) and transport (1.2% growth) struggling. Other areas, such as food services (4.1% growth) and real estate (3.8% growth) performed better.
However, the information and communication sector shrank by 3%, and financial and insurance activities saw a contraction of 9.6%.
The NAC also approved the growth rate for the first three quarters of the fiscal year. Growth was 2.71% in the first quarter, 1.8% in the second quarter, and 2.1% in the third quarter.
The government is planning to keep GDP growth at 3.7% and inflation at 11.8% for the next fiscal year. However, it is unclear how they will achieve these targets given the current economic conditions.