GROWTH AND SECTOR WISE COMPOSITION OF GDP

The economic growth is a broad based phenomena and is shared by all the sectors of the economy. These major sectors are commodity sector and the services sector. The components of commodity sectors are Agriculture sector, industrial sector, mining and quarrying, construction and power sector while the components of services sector are transport, storage and communication sector, wholesale and retail trade sector, ownership of dwellings, public administration and defense, etc. There is a remarkable increase is absorb in the services sector. The services sector performs very well from the fiscal year of 2001 to 2006 as compare to the other sectors of economy. We can say that services sector is emerged as a new growth power house. The contribution of service sector in the growth of the GDP is gradually increases from fiscal year 2001 to 2006 – from 2.69 percentage points in fiscal year 2002-03 to 4.51 in fiscal year 2005-06. While the condition of other sector of economy is very pathetic. It is said that Pakistan is an agriculture base country but its contribution in the GDP of the economy is decreases gradually from fiscal year 2002-03 to 2004-05, the only rise is reported in 2004-05 which is 1.54 percentage points but it is again declines in fiscal year 2005-06 at 0.99 percent.

 The composition or the structure of the GDP has undergoing considerable changes during the last three and half decades. The commodity sector which contributed the GDP in fiscal year 1969-70 by 61.6 percent is decreased in fiscal year 2001-02 by 13.7 percentage point decline and reaches at percentage point 47.9, which further declined by 0.8 percentage point and reaches at 47.1 percent. In fiscal year fiscal year 2003-04 the commodity sector increases its contribution 48.4 percent and 48.7 percent in fiscal year 2004-05 – an increase in .3 percentage point. But commodity sector is unable to retain this contribution and once again decreased by 01 percentage point and reaches at 47.7 percent in fiscal year 2005-06. In general we can say that the share of commodity sector decreases in last 6 years.

 The agriculture sector which is contributed the GDP by 39 percent in fiscal year 1969-70 is gradually decreases in fiscal year 2001-02 by 14.8 percentage points and reaches 24 percent and retain this contribution in fiscal year 2002-03. In fiscal year 2003- 04 the agriculture sector is further decreases by 1.1 percentage point and reaches 23 percent which further decreases by 22.5 percent in fiscal year 2004-05 and 22.5 percent in fiscal year 2005-06 — the decline of 0.4 percentage point and 0.9 percentage point respectively. We can say that the share of agriculture in GDP has declined by 4.3 percentage point in the last six years alone.

 The mining and quarrying sector has better position in the contribution of GDP. In fiscal year 1969-07 the contribution of mining and quarrying is very low that is just 0.5 percent but is increases at 2 percentage point in fiscal year 2001-02 and reach 2.4 percent, which is further increases from fiscal year 2002 to fiscal year 2005 by 0.1 percentage points and reaches 2.5 percent, 2.6 percent and 2.7 percent respectively but is decreases by 0.1 percentage point and reaches 2.6 percent again in fiscal year 2005-06.

 The industrialization sector has also in better position it has been growing two to three times faster then agriculture. The contribution of industrialization in GDP is gradually increases from fiscal year 2001-02 to fiscal year 2005-06 that are 15.9 percent to 17.9 percent respectively. The condition of Constructions and power sector towards the contribution in GDP is again very pathetic.

 In service sector the whole sale and retail trade has a great contribution to increase the GDP of the economy but the owner ship of dwellings has very low contribution in the - 4 - GDP of the country. The contribution of GDP by the public administration and defense is decreases from the fiscal year 2004-05 at 0.4 percentage point ratio. Transportation, storage and communication are decreases from fiscal year 2003-04.

 The agriculture sector is far behind because of the government’s policies to ignore the minor crops and ignorance about new technologies this ignorance results the shrinking the contribution of agriculture in GDP as the industrialization sector grew faster then the agriculture sector. Government should keep an eye on the major crops as well as minor crops as agriculture is a bake bone of Pakistan’s economy and to over the future upcoming threats of food availability in Pakistan. In industrialization the government is encourage the large scale industries and ignoring the small scale industry which is again not satiable for the growth of economy. The Government should change its policies for adopting a rapid and sustainable growth of the economy.

 

 Sectoral Share Of Various Sectors in Gross Domestic Product (Constantan Factor Cost)  
 
 1969-70
 2001-02
 2002- 03
 2003- 04
 2004-05
 2005-06
 Commodity Producing Sector  
 61.6  
 47.9  
 47.1  
 48.4  
 48.7  
 47.7  
 1. Agriculture    
38.9  
 
24.1  
 
24  
 
22.9  
 
22.5  
 
21.6  
  - Major Crops    
23.4  
 
8  
 
8.2  
 
7.8  
 
8.4  
 
7.6  
  - Minor Crops    
4.2  
 
3.1  
 
3  
 
2.9  
 
2.8  
 
2.7  
 - Live Stock    
10.6  
 
12  
 
11.8  
 
11.2  
 
10.6  
 
10.7  
 - Fishing    
0.5  
 
0.3  
 
0.3  
 
0.3  
 
0.3  
 
0.3  
 - Forestry    
0.1  
 
0.7  
 
0.7  
 
0.6  
 
0.4  
 
0.3  
 2. Mining & Quarrying    
0.5  
 
2.4  
 
2.5  
 
2.6  
 
2.7  
 
2.6  
 3. Manufacturing    
16  
 
15.9  
 
16.3  
 
17.3  
 
17.9  
 
18.2  
  - Large Scale    
12.5  
 
10.4  
 
10.6  
 
11.7  
 
12.4  
 
12.7  
  - Small Scale    
3.5  
 
4.1  
 
4.2  
 
4.2  
 
4.2  
 
4.3  
 4. Construction    
4.2  
 
2.4  
 
2.4  
 
2  
 
2.1  
 
2.2  
 5. Electricity & Gas Distribution    
2  
 
3  
 
2.4  
 
3.7  
 
3.5  
 
3  
 Services Sector    
38.4  
 
52.1  
 
52.3  
 
51.6  
 
51.3  
 
52.3  
 6. Transport, Storage and Communication    
6.3  
 
11.4  
 
11.4  
 
10.9  
 
10.4  
 
10.5  
 7. Wholesale and Retail Trade    
13.8  
 
17.8  
 
18  
 
18.2  
 
18.6  
 
19.2  
 8. Finance and Insurance    
1.8  
 
3.5  
 
3.3  
 
3.4  
 
4  
 
4.6  
 9. Ownership of Dwellings    
3.4  
 
3.2  
 
3.1  
 
3  
 
2.9  
 
2.8  
 10. Public Admn. & Defense    
6.4  
 
6.4  
 
6.6  
 
6.3  
 
5.9  
 
5.8  
 11.Other Services    
6.7  
 
9.8  
 
9.9  
 
9.7  
 
9.5  
 
9.5  
 12. GDP (Constant Factor Cost)    
100  
 
100  
 
100  
 
100  
 
100  
 
100  
 
P) Stands for provisional.  
  
Source: Economic Adviser’s Wing, Finance Division  

 

 

 Sectoral Contribution to the GDP Growth 
 sector    2002-03    2003-04    2004-05    2005-06  
 agriculture    1.04    0.55    1.54    0.55  
 industry    1.01    3.84    2.91    1.54  
 manufacture    1.1    2.28    2.17    1.53  
 Services    2.69    3.09    4.12    4.51  
 Real GDP (Fc)    4.73    7.48    8.57    6.61  
 
Source: Federal Bureau of Statistics. 

 

(Muhammad Aamer Shahzad)

 

 

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