Think Tank Flags Methodology Flaws in Pakistan’s 3.7% GDP Growth

An independent think tank has challenged the government’s claim of a 3.7% economic growth in the first quarter, calling it “growth on paper” rather than real production expansion. The Economic Policy and Business Development (EPBD) think tank said methodological manipulations and import-driven assembly operations have created an illusion of growth, urging the government to implement business-friendly policies to drive genuine private-led economic expansion.

The EPBD report highlights that food exports fell 25.8%, while imports rose 18.8%, showing a stark disconnect between reported growth and actual production. Similarly, cotton production and ginning declined, yet textile exports grew due to imported synthetic fibers. Construction and industrial growth, the think tank observed, relied heavily on imported machinery and energy subsidies, rather than domestic productivity increases.

Ahmad Nawaz Sukhera, EPBD CEO, noted, “Growth exists only on numbers; without real business activity, the economy cannot achieve sustained progress.”

Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb welcomed the 3.7% growth as a sign of economic recovery. However, EPBD highlighted inconsistencies, including:

• Industrial growth of 9.4% inflated by deflator manipulation
• Electricity sector growth fueled by subsidies rising from Rs20 billion to Rs118 billion
• Construction growth driven by imports, not domestic production

The think tank stressed that high taxes, soaring energy prices, and inconsistent policies continue to challenge Pakistan’s manufacturing and export sectors.

EPBD urges the government to enable private sector growth, reduce dependency on imports, and encourage domestic production. Only then can reported numbers translate into sustainable, real economic growth.