Pakistan’s Chief Statistician Dr. Naeemuz Zafar revealed on Thursday that the country’s 2.7% GDP growth figure for the current fiscal year is based on a 15-year-old livestock survey and assumes full utilisation of the Rs1.1 trillion Public Sector Development Programme (PSDP) — despite actual spending falling significantly short.
While addressing concerns alongside Planning Minister Ahsan Iqbal, Dr. Zafar insisted that the growth estimate is unlikely to see major revisions, despite criticism from independent economists who estimate the real figure to be closer to 2%. A particular point of contention is the reported 4.8% growth in the livestock sector, which was calculated using data from a 2010 survey.
Responding to questions at the National Assembly Standing Committee on Finance, Zafar said that although major crop production dropped by 14%, the agriculture sector still posted 0.6% growth, thanks to gains in livestock, forestry, and minor crops. He emphasised that the GDP was calculated using internationally recognised methodologies and added that a new agriculture and livestock census has been completed but is pending approval from the planning minister.
Zafar also acknowledged that GDP calculations assumed full utilisation of the PSDP allocation, which amounted to Rs1.1 trillion. However, Finance Secretary Imdad Ullah Bosal disclosed that only Rs662 billion had actually been spent so far, with final spending expected to stay under the revised Rs967 billion mark.
Planning Minister Iqbal stated that Pakistan is on a path to economic recovery, though constrained by fiscal challenges. He highlighted that next year’s federal PSDP allocation will shrink to just 0.8% of GDP — a significant drop from 2.6% seven years ago. He warned that Pakistan’s limited revenue base is barely sufficient to cover defence and debt obligations, leaving little room for public development.
In an effort to reform resource distribution, Iqbal proposed an overhaul of the National Finance Commission (NFC) formula. Currently, 82% of resources are distributed based on population. He argued that this model inadvertently encourages population growth, which harms long-term national interests. Iqbal recommended introducing broader indicators such as education and environmental preservation. He also announced the formation of a Pakistan Population Council, to be headed by provincial chief ministers, to address the country’s 2.6% annual population growth — nearly equal to the GDP growth rate.
On the digital economy, Iqbal clarified that new taxes introduced by the Federal Board of Revenue (FBR) were intended to level the playing field for conventional retailers.
Despite tight fiscal space, the government has earmarked Rs230 billion from the PSDP for development projects in Balochistan. Iqbal reiterated the government’s commitment to building water infrastructure, including the Diamer Basha and Mohmand Dams, which are expected to be completed by 2030. He announced plans to accelerate construction on Diamer Basha Dam, aiming to finish two years ahead of schedule.
However, he confirmed that budget limitations have forced a reduction in Higher Education Commission (HEC) funding to Rs39.5 billion, suggesting that provincial governments should assume more responsibility for financing universities.
