The year, 2023-24, has witnessed the lowest ever level of fixed investment in Pakistan. It is estimated at 11.4% of the GDP. This is in comparison to 15.4% of the GDP in 2017-18 and even higher at 16.3% of the GDP, as far back as 2007-08. Both private and public investments have declined sharply in 2023-24. Public investment stands at 2.8% of the GDP, as compared to 4.6% of the GDP in 2017-18. Private investment has plummeted to 11.4% of the GDP from 15.4% of the GDP in 2017-18.

There have also been simultaneously big changes in the sectoral composition of investment by the private sector. The share, in particular, of manufacturing has declined sharply from almost 20% in 2017-18 to 11% in 2023-24. The absolute magnitude at constant prices has fallen by over 51%. Similarly, investment in the transportation, information and communication and other sectors has declined by 60%, 47% and 21%, respectively.

Fortunately, the momentum has been preserved in the agricultural sector, with a share in total private investment of over 35%. There has been an annual growth rate of almost 3% in investment in this sector since 1999-2000.

The big surprise is that while there is an investment slump, the real estate sector is experiencing a veritable boom in new projects. The share of private investment in this sector has risen to 22% and, in 2023-24 the sector saw twice the level of investment as in the manufacturing sector. While the annual growth rate of private investment has been 2.5% since 1999-2000, it has been significantly higher at almost 4% in real estate.........

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