Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Showing posts with label GDP. Show all posts

Tuesday, July 7, 2026

Pakistan Needs to Address Its Significant Data Quality Challenges

Policy-makers need data to formulate good policies. Good data produced by government agencies can be expected to lead to good policies and desirable outcomes. But data collection and statistical analyses require adequate methodologies and resources. Unfortunately, Pakistan's data quality gets a "C" grade by international agencies like the International Monetary Fund (IMF). Clearly the country faces significant data quality challenges. These challenges range from estimation of the size and scope of the informal economy and electricity demand/consumption to education and nutrition. Here are some examples of where the Pakistan Bureau of Statistics (PBS) data differs sharply from what is being reported by non-government groups:

1. Gross Domestic Product:

A large chunk of Pakistan's economy is not documented. The PBS seems to be failing in making even the most rudimentary estimates of it. A 2024 joint study of the International Labor Organization and the Small and Medium Enterprise Development Authority (SMEDA) estimated Pakistan's undocumented economy at $457 billion. While other South Asian nations, particularly Bangladesh and India, do include estimated undocumented GDP figures in their official GDP, Pakistan's official GDP figures do not include such estimates. If the Pakistani government decides to include estimates of the informal economy in its official figures, the country's GDP would jump to $1,059 billion in market exchange terms and over $4,000 billion in PPP terms.

Pakistan's Total GDP, including Undocumented, Estimated at over $1 Trillion

2. Electricity Consumption:

Electricity demand and consumption are very important indicators of socioeconomic development in any country. Unfortunately, the PBS is failing to comprehend the scale of solarization and energy consumption in Pakistan. The country is experiencing soaring demand for electricity across all of the sectors of its economy. The new demand is being met by rapidly growing deployment of distributed solar, estimated at 38 GW as of June, 2025. In 2025, 44% of solar deployment was residential, followed by industry (26%), agriculture (21%) and commercial users (9%). The expansion of distributed solar has enhanced electrification across the economy, lifting Pakistan's electrification rate to 21.7% in FY2025 from 17% in FY2023, close to the global average of 22%. This surge to over 200 terawatt-hours of electricity is not reflected in official data, according to a report by Ember Energy titled "The solarization of Pakistan's energy economy".

Actual Solar Deployment in Pakistan Far Exceeds Official Stats. Source: Ember

Pakistan Electricity Consumption Trend. Source: Ember

3. Out of School Children:

The Annual Status of Education Report (ASER) Pakistan 2025 national report, officially released on March 26, 2026, shows that the number of "Out of School Children" (OOSC) aged 6-16 years in Pakistan is now 5 million, not 25 million generally reported. "The findings on access are encouraging. Enrollment levels are high, with 92.2 percent of children aged 6–16 in school and only 7.7 percent out of school", says the ASER Pakistan 2025 report. ASER Pakistan is a citizen-led initiative, primarily led by Idara-e-Taleem-o-Aagahi (ITA) in collaboration with various national and international partners to promote foundational learning. It also works closely with over 10,000 volunteers and numerous local civil society organizations such as the Aga Khan Foundation (AKF), PAL Network (People's Action for Learning), UNESCO and federal and provincial government departments in Pakistan.

Enrolling Out of School Children in Pakistan. Source: ASER Via Bilal Gilani

4. Pakistan Household Survey:

The HIES 2024-25 household integrated economic survey by Pakistan Bureau of Statistics (PBS) raises more questions than it answers. For example, it shows that Pakistani households are buying lower amounts of basic food ingredients like wheat, meat and eggs in the last four years, implying that people are eating less to cover other expenses, like electricity and gas. But it doesn't explain why the households have reported significantly lower purchases of these items than production reported recently by the PBS. What is the source of this discrepancy? Is the data flawed? Or, is it missing a new trend toward less home cooking? Is the young urbanized population buying more prepared foods? Are they ordering out more often using ubiquitous food delivery services?

21% Pakistanis Buy Tandoori Nan. Source: Gallup Pakistan

Summary:

Clearly, the Pakistan Bureau of Statistics (PBS) faces significant data quality challenges in areas such as the size of the informal economy to electricity consumption, education and nutrition.

Pakistan PBS Budget. Source: Zehra Farooq

To keep up with the demands of modern governance, the PBS needs to carry out substantial reforms aimed at improving transparency, quality, and data credibility. The reliability of national indicators such as GDP, electricity consumption, education and nutrition is critical not only for local policy but also for global perception and investor confidence. It also requires additional funding for new technology, increased expertise in field offices and more enumerators in the field to collect data. The PBS's current annual budget of Rs. 5.1 billion (US$18 million) for a population of over 250 million people is not enough to do justice.

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ASER Pakistan Reports Substantial Progress in Enrolling Out-of-School Children

Pakistan Household Survey Raises More Questions Than It Answers

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Growing Presence of Pakistani Women in Science and Technology

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Thursday, June 18, 2026

Does Pakistan's Real GDP Exceed One Trillion US Dollars?

A 2024 joint study of the International Labor Organization and the Small and Medium Enterprise Development Authority (SMEDA) estimated Pakistan's undocumented economy at $457 billion. While other South Asian nations, particularly Bangladesh and India, do include estimated undocumented GDP figures in their official GDP, Pakistan's official GDP figures do not include such estimates. If the Pakistani government decides to include estimates of the informal economy in its official figures, the country's GDP would jump to $1,059 billion in market exchange terms and over $4,000 billion in PPP terms.

Pakistan's Total GDP, including Undocumented, Estimated at over $1 Trillion

In 2023 when the ILO-SMEDA study was conducted, Pakistan's official GDP was $340 billion (34% less than the undocumented GDP), bringing the total real GDP for 2023 to $797 billion. Pakistan's official GDP figure for 2025-26 is projected to be $452 billion. Assuming that the undocumented GDP has grown at the same rate as the official GDP, the undocumented GDP today works out to $607 billion, bringing the total GDP (documented and undocumented) to over $1 trillion. In terms of purchasing power parity, the total national economy, including the informal economy, is estimated to be over $4 trillion, which translates to over $16,000 per capita.

Being the largest employer, Pakistan's undocumented sector acts as a critical shock absorber for the labor force and sustains millions of low-income households. But it also restricts the government tax collection which could be invested in education, healthcare and infrastructure development. There is a temptation in Pakistan to force documentation of the entire economy as the Indian government has attempted to do. However, it will create a mass unemployment problem as many small businesses would be forced to close.

India is an example of what can go wrong in attempting to bring the informal sector into the tax net too quickly. Demonetization and GST taxes together have decimated the informal sector. But the Indian government continues to significantly overestimate its annual economic growth, particularly by misjudging the size and trajectory of the country's informal (undocumented) sector. Because of these estimation errors, researchers, including India's former Chief Economic Adviser Arvind Subramanian, estimate that the absolute level of India's real GDP may be overstated by 22% to 31%. This implies the average citizen's actual standard of living is lower than official data suggests.

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Monday, March 16, 2026

Modi's Ex Chief Economic Advisor: India's Economy is 22% to 31% Smaller Than Official Claim

New research by several economists, including India's former Chief Economic Adviser Arvind Subramanian, finds that the country's GDP has been overstated by 22% to 31%. It says: "The level of (India's) real GDP is overstated by about 22% and the level of consumption by about 31%". "India's economy is thus smaller and the average standard of living significantly lower than official estimates indicate", it adds. The current GDP of India is less than $3 trillion, according to the authors.

Indian GDP Overstated by 22% to 31%. Source: PIIE

In a paper published by Peterson Institute for International Economics, the authors state that "India’s annual economic growth during the boom years between 2005 and 2011 may have been underestimated by about 1–1½ percentage points on average, and subsequent growth between 2012 and 2023 may have been overestimated by about 1½-2 percentage points". It means that India's actual annual GDP growth during Prime Minister Modi's government has been closer to 4%, not 6% as officially claimed. Pakistan's GDP growth rate has been about 3.5% during this period.

The authors explain that the estimation error is caused by two methodological issues. The first issue leading to the misestimation is that the economy’s formal sector has been used as a proxy for the vast informal sector, even though the latter was disproportionately hit after 2015 by demonetization, the introduction of the goods and services tax, and the COVID-19 pandemic. The second issue causing misestimation is that the deflators for many sectors have been based on commodity prices, which have moved sharply relative to others.

Ruling politicians in New Delhi continue to hype their country's economic growth even as the Indian currency hits new lows against the US dollar, corporate profits fall, electrical power demand slows, domestic savings and investment rates decline and foreign capital flees Indian markets. The International Monetary Fund (IMF) has questioned India's GDP and independent economists Professors Arun Kumar and Ashoka Modi and investment banker Ruchir Sharma have detailed why the Indian official data can not be trusted. It seems that the BJP-led government of Prime Minister Narendra Modi is fast losing credibility by politicizing the civilian bureaucracy and the military brass to project their economic and military failures as successes.

IMF Gives C Grade to India's GDP Data

Beyond the disputed claim of being the "fourth largest economy", the Modi government's failure on the national health and wellness front is also getting more attention. “Air is unbreathable. Water is undrinkable. Food is adulterated. What’s the point of becoming the 4th largest economy?” asked India-American technology entrepreneur Sabeer Bhatia in an X message recently. Gita Gopnath, Harvard professor of economics, said at the World Economic Forum in Davos this week that the economic impact of pollution on India is more severe than the effects of tariffs imposed on the country. “About 1.7 million lives are lost every year in India because of pollution. That’s 18% of the total deaths in India,” Gopinath said, quoting a World Bank study. “Even from an international investor’s perspective … the pollution holds you back.”

Unsafe Drinking Water in India Claimed as 4th Largest Economy. Source: DownToEarth

An international badminton tournament in India has brought global spotlight on the lack of basic hygiene in India. Foreign players complained about dusty floors, dirty courts, bird droppings and unhygienic conditions at the India Open in New Delhi. “I think the floors are dirty. There is a lot of dirt on the courts. There’s bird excrement. There are birds flying around in the arena,” said 28 year-old Denmark women’s singles player Mia Blichfeldt. Andres Antonson, world number three badminton player, withdrew from the India Open Super 750 in New Delhi for the third consecutive year, choosing to pay a $5,000 fine. He cited "extreme" hazardous air pollution in Delhi as the reason for skipping the mandatory tournament, arguing it is not a safe place to hold the event.

The IMF has recently expressed doubts about Prime Minister Narendra Modi's BJP government's GDP data. It has particularly questioned the government's statistical methodologies, inflation measurement, and the estimates of the informal economy used in reporting the country's gross domestic product. Professor Arun Kumar of Jawaharlal Nehru University believes the IMF's concerns are valid. He thinks the real size of India's economy is only half of what is officially claimed. “The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganized sector, which is actually declining. This is building up over a period of time,” Kumar told Indian journalist Karan Thapar.

In its recent assessment, the International Monetary Fund (IMF) has given a "C" grade to India's national accounts. In particular, the IMF has raised the issue of the government using 2011-12 as the base year as being outdated, the discrepancy between production and consumption data and the use of Wholesale Price Index, and not a Producer Price Index, to deflate many economic activities to derive real GDP from nominal GDP.

Indian Firms Falling Corporate Profits. Source: Bloomberg

Corporate profits of Indian firms are growing at a much slower pace than the 8.2% GDP growth in its most recent quarter. Net income for Nifty 50 Index firms likely rose 1.1% in the three months through Dec. 31 from a year earlier, according to analyst estimates compiled by Bloomberg. That would be the slowest pace in five quarters, weighed down by deteriorating margins for banks. Falling profits and declining currency are causing foreign capital to flee Indian markets. Foreign Portfolio Investors (FPIs) pulled out over $20 billion from Indian equities in 2025, marking a severe, sustained withdrawal that has continued into 2026. Net Foreign Direct Investment (FDI) has seen consecutive monthly outflows, including $1.67 billion in October and $446 million in November 2025. Investment banker Ruchir Sharma wrote about it in a Financial Times op ed titled "India needs to import more capital and export fewer workers". Ruchir wrote: "Most strikingly, corporate revenue normally grows (or shrinks) with the economy — in any country. But last year corporate revenue growth for listed companies in India decelerated to barely half the GDP growth rate"

Falling Indian Rupee. Source: Reuters

The source of the biggest error is the way India estimates the informal economy which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the formal sector as a proxy to estimate the performance of the informal sector. But if the two sectors are moving in opposite directions, as has happened after demonetization, GST imposition and the pandemic, you could end up overestimating the unorganized sector.

Indian-American economist Ashoka Mody, author of "India is Broken", has argued that the current unemployment crisis in India is a direct result of the destruction of the informal sector, particularly the mom and pop stores that employed a large number of Indians.

Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (households have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "

Sunday, January 25, 2026

Independent Economists Expose Modi's Fake GDP

IMF Gives C Grade to India's GDP Data

Unsafe Drinking Water in India Claimed as 4th Largest Economy. Source: DownToEarth

Indian Firms Falling Corporate Profits. Source: Bloomberg

Falling Indian Rupee. Source: Reuters

Sunday, November 30, 2025

IMF Questions Modi's GDP Data: Is India's Economy Half the Size of the Official Claim?

The Indian government reported faster-than-expected GDP growth of 8.2% for the September quarter. It came as a surprise to many economists who were expecting a slowdown based on the recent high-frequency indicators such as consumer goods sales and durable goods production, as well as two-wheeler sales. At the same time, The International Monetary Fund expressed doubts about the Indian government's GDP data.

Tuesday, July 22, 2025

Which Country is a Bigger Beggar? India or Pakistan?

Most countries in the world today borrow money from various sources to finance their budget deficits. So do India and Pakistan. So why is it that only Pakistan's borrowing money gets labeled "begging"? Is it not begging when India borrows a lot more money than does Pakistan? Or is it that only borrowing money from the IMF qualifies as "begging"? Let's look into this double standard. Currently, India's public debt to GDP ratio is 80% while Pakistan's is about 74%. India's private debt to GDP ratio is 17%, twice that of Pakistan. Do these figures mean that India is a bigger beggar than Pakistan?

Debt-to-GDP Ratios Around the World. Source: Visual Capitalist

India is consistently among the largest borrowers from International Financial Institutions (IFIs), particularly the World Bank and the Asian Development Bank (ADB). It has been the top debtor to the World Bank for several years and a major borrower from the ADB. India’s outstanding loan balance with the World Bank is almost double that of the next biggest debtor, Indonesia, which owed the bank $22.2 billion. Pakistan and Bangladesh followed with just short of $20 billion and $19.8 billion, respectively. India is also the largest borrower from the Asian Development Bank (ADB). Since 1986, when ADB began lending to India, it has approved many loans, grants, and technical assistance totaling $55.3 billion.

Top Debtors to World Bank 2025. Source: Visual Nerd

One key difference between the two South Asian neighbors is the frequency with which Pakistan has been borrowing from the International Monetary Fund, known as the lender of last resort. Pakistani economic managers have had a poor track record of managing hard currency reserves that the country needs to import what it lacks. Pakistani exports have failed to keep pace with its rising imports. This situation creates a crisis situation every few years and it forces the country to ask the IMF to lend its US dollars. Currently, Pakistan ($6.3 billion) is IMF's 5th highest debtor after Argentina ($31.1 billion), Ukraine ($10.19 billion), Egypt ($8.6 billion) and Ecuador ($6.6 billion). The only saving grace is the rapid growth in remittances from the Pakistani diaspora. In the last fiscal year that ended in June, 2025, overseas Pakistanis sent home $38.3 billion, representing 27% growth from the prior fiscal year. It helped Pakistan achieve a current account surplus of $2.1 billion, compared to a current account deficit of $2.1 billion in the previous fiscal year.

Global Income Levels By Country. Source: Visual Capitalist

Top IMF Debtor Nations. Source: IntelPoint

Pakistan's average economic growth of 5% a year has been faster than the global average since the 1960s, it has been slower than that of its peers in East Asia. It has essentially been constrained by Pakistan's recurring balance of payment (BOP) crises as explained by Thirlwall's Law. Pakistan has been forced to seek IMF bailouts 14 times in the last 75 years to deal with its BOP crises. This has happened in spite of the fact that remittances from overseas Pakistanis have grown 38X since 2000. Every time Pakistan has faced a balance of payments crisis, the result has been massive currency devaluation, high inflation and slower growth for a period of multiple years. The best way for Pakistan to accelerate its growth beyond 5% is to boost its exports by investing in export-oriented industries, and by incentivizing higher savings and investments.

Tuesday, October 29, 2024

Will India Grow Old Before it Gets Rich?

India's population has aged faster than expected while its economic growth has slowed over the last decade. This raises the obvious questions: Will India get old before it gets rich? Is India getting poorer relative to its peers in the emerging markets?

India's Population Aging. Source: Semafor

As India's birth rate declines rapidly, the proportion of people age 60 and over is rising in the general population. This is particularly true of the southern states like Kerala and Tamil Nadu. Meanwhile, the expected demographic dividend from the youth bulge in the country has yet to materialize. High youth unemployment is threatening to cause serious social instability in the world's most populous country. It is also causing a massive brain drain.

India's GDP Per Capita Compared to Emerging Markets Average. Source: IMF

India is losing its best and brightest to the West, particularly to the United States, at an increasingly rapid pace. A 2023 study of the 1,000 top scorers in the 2010 entrance exams to the Indian Institutes of Technology (IIT) — a network of prestigious institutions of higher learning based in 23 Indian cities — revealed the scale of the problem. Around 36% migrated abroad, and of the top 100 scorers, 62% left the country, according to a report in the science journal Nature. Nearly two-thirds of those leaving India are highly educated, having received academic or vocational training. This is the highest for any country, according to the Organization for Economic Co-operation and Development.

Annual Population Growth Rapidly Falling Across India. Source: Semafor

India has the lowest GDP per capita among the 5 BRICS nations. The country's GDP growth rate is much slower than the average for emerging markets. It means that India is becoming poorer relative to the rest of the developing world.

GDP Per Capita Map 2024. Source: IMF

India's GDP Per Capita is Very Low. Source: BBC

The north-side geographic divide in India is growing. The southern five of India’s 28 states (Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana) contain 20% of the population and contribute 31% of the GDP, according to The Economist magazine. Among startups, 46% of tech “unicorns” are southerners, particularly from Bangalore. The five southern states provide 66% of the it-services industry’s exports. The latest craze is for “global capability centers”, where multinationals assemble their global auditors, lawyers, designers, architects and other professionals: 79% of these hubs are in the south.

Indian Parliament Seats Based on Current Population. Source: National Herald

There has always been a north-south divide in India in terms of population and wealth. The south has been wealthier and less populous than the north. But the political power is still concentrated in the poorer and more populous northern states. This situation serves Prime Minister Narendra Modi and his BJP party well. But it also creates significant resentment in southern states.

In his book "The Raisina Model", British Lord Meghand Desai says that India's breakup can not be ruled out. Specifically, he points to three issues that could lead to it:

1. Cow protection squads are killing Muslims and jeopardizing their livelihoods. The current agitation about beef eating and gau raksha is in the Hindi belt just an excuse for attacking Muslims blatantly. As most slaughterhouses in UP are Muslim-owned, owners and employees of these places are prime targets.

2. India has still not fashioned a narrative about its nationhood which can satisfy all. The two rival narratives—secular and Hindu nation—are both centered in the Hindi belt extending to Gujarat and Maharashtra at the most. This area comprises 51% of the total population and around 45% of the Muslims in India.

3. India has avoided equal treatment of unequal units. Representation in the Rajya Sabha (Upper House of Parliament) is proportional to population size. The larger states dominate both Houses of Parliament. It would be difficult for small states to object, much less initiate reform. In future, small states could unite to present their case for better treatment.

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Sunday, August 25, 2024

Following the Money: Insights into Pakistan's Budget 2024-25

A look at Pakistan's current fiscal year 2024-25 budget helps gain insights into how the country is run. It shows the money flows from the key sources of revenue and the nation's spending priorities. Total planned federal spending for the current fiscal year is Rs.18,900 billion (about 69 billion U.S. dollars). This figure does not include the transfer of Rs. 7,438 (US$ 26 billion) from the federal government to the provinces. Under the 18th amendment passed in 2010, the federal government is obligated to share 57.5% of its revenue with the provinces. The federal government is primarily responsible for defense, foreign affairs, debt servicing, foreign trade, ports and shipping, and development programs, while food and agriculture, education, healthcare and housing are devolved to the provinces. There still appears to be some overlap of domestic responsibilities between the federation and the provinces.

Pakistan's Budget 2024-25 at a Glance. Visualization Courtesy of Prof Adil Najam

The federal government's total revenue is expected to be Rs. 17, 815 billion (US$ 65 billion). In addition, Islamabad plans to borrow Rs. 8,470 billion ($31 billion) during the fiscal year. Interest payments of Rs. 9,775 billion ($ 36 billion) will account for more than half of the federal budget this year. Debt servicing costs will also exceed the planned borrowing (of Rs. 8,470 billion) for the year. In other words, all of what the government plans to borrow this fiscal year will be used to service the current debt on the books.

Detailed Budget Visualization By Dr. Adil Najam via Dawn

Federal debt servicing costs (Rs. 9,775 billion or $35 billion, 9.3% of current GDP) have spiked in recent years due to the State Bank's tight monetary policy designed to fight persistent double digit inflation. In fact, interest payments on debt are by far the biggest single federal expenditure line item, far surpassing the Rs. 2, 122 billion ($7.7 billion or 2% of current GDP) defense spending. Higher interest rates have also dramatically slowed down the economy.

Pakistani provinces raise some of their own revenue on top of the transfers from the federal government. For example, Punjab, the largest of the four provinces, plans to spend an estimated Rs. 4,643.4 billion ($17 billion); including the federal transfer of Rs. 3,683.1 billion and about Rs. 960 billion ($3.5 billion) of provincial tax revenue.

Sind, the second largest province, has a Rs. 3,056 ($11 billion) budget that includes Rs. 1,854 billion from the federal government, and Rs. 1,202 billion ($4.35 billion) from its revenue sources. KP, the third largest province, has a Rs1,754 billion ($6.4 billion) budget, including Rs. 1,222 billion from the federal government and Rs. 532 billion ($1.9 billion) provincial revenue. Balochistan's budget is Rs. 956 billion ($3.5 billion) that includes Rs. 667 billion from the federal government and Rs. 290 billion ($1 billion) from its resources.

Altogether, the federal and provincial governments expect to raise about $75 billion in revenue, representing 20% of $375 billion GDP for fiscal year 2023-24. This is not bad for a developing country like Pakistan. The defense allocation of Rs. 2,122, the second largest federal expenditure, is a mere 2% of the current GDP. The biggest expenditure this year will be the interest payments of Rs. 9,775, accounting for over 50% of the federal budget and 9.3% of the current GDP. These debt servicing costs will hopefully come down as the State Bank cuts its interest rates this year and next. Lower interest payments in future years should free up money for other more pressing needs in the areas of education, healthcare, energy and infrastructure.

Thursday, June 13, 2024

Agriculture: A Rare Bright Spot in Pakistan's Economy

Pakistan's agriculture sector grew 6.3% in 2023-24, far outpacing the overall economy that grew just 2.38%, according to the Economic Survey of Pakistan 2023-24. This is good news for about 40% of the country's population working in the agriculture sector. By contrast, India's agriculture growth slowed to 1.2% in recent quarters. Studies have shown that strong growth in agriculture helps reduce poverty in developing nations like India and Pakistan.

Snapshot of Pakistan's Economy. Source: Economic Survey of Pakistan 2023-24

The agriculture growth in Pakistan was the highest in 19 years. All major crops saw significant increases. Wheat output jumped 11.6% from 28.2 million tons last year to 31.4 million tons this year, the economic survey said. Cotton, severely damaged by floods and rains last year, reached 10.2 million bales compared to 4.9 million bales last year, growing by 108.2%. Rice output also saw a significant increase — up by 34.8% — reaching 9.9 million tons compared to 7.3 million tons.

Strong crop output is in part the result of higher yields from increased water and fertilizer availability to farmers, according to the economic survey.

The survey said the water availability during Kharif 2023 increased to 61.9 million acre-feet (MAF) from 43.3 MAF in Kharif 2022 (when the floods hit). For Rabi 2023-24, the water availability was 30.6 MAF, showing an increase of 4.1% over Rabi 2022-23.

Domestic fertilizer production during FY24 (July-March) rose by 17.3% to 3.25 million tons compared to 2.77 million tons in the same period of FY23. Fertilizer imports also increased by 23.7%, reaching 524,000 tons. The availability of fertilizer increased by 18.1% to 3.77 million tons.

Pakistan's Rice Exports Soared 80% in Current Fiscal Year. Source: FT

The value of Pakistan’s rice exports soared to $3.6 billion over the last 11 months, up from $2 billion in July to May 2022-23. Its previous record for was 4.8 million metric tons of rice exports, valued at about $2.5 billion in 2021-22, according to the Financial Times.

Pakistan is among the world's largest food producing countries. It produces large and growing quantities of cereals, meat, milk, fruits and vegetables. Currently, Pakistan produces about 38 million tons of cereals (mainly wheat, rice and corn), 17 million tons of fruits and vegetables, 70 million tons of sugarcane, 60 million tons of milk and 4.5 million tons of meat. Total value of the nation's agricultural output exceeds $70 billion. Improving agriculture inputs and modernizing value chains can help the farm sector become much more productive to serve both domestic and export markets.

Agriculture is considered a key tool for reducing poverty in developing countries like Pakistan. It employs almost half of the rural workforce, contributes around 20% to the country's GDP, and provides raw materials for agro-based industries, according to a study by Yaping Liu, Asad Amin, Samma Faiz Rasool, and Qamar Uz Zaman. However, some studies suggest that agriculture may only help mitigate rural poverty in the long term, while other sources say that sustainable agriculture practices can significantly improve agricultural production and reduce poverty.

Pakistan Sets New Record For Rice Exports

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