Annual Economic Review of 2021-22 Apparently, both the major crop and large-scale manufacturing sectors have shown outstanding performance with growth rates above 6 percent and 10 percent respectively in both 2020-21 and 2021-22. Similarly, the relatively large wholesale and retail trade sector has shown growth of 10 percent or more during the last two years. The growth rate of the different expenditure components of the GDP is shown in Table 3.2. Table 3.2: GDP and Expenditure Growth Rates 2020-21 and 2021-22 (%) 2020-21 2021-22 Household Consumption Expenditure 9.3 10.1 Government Consumption Expenditure 1.8-3.4 The numbers in Table 3.2 provide the first indication that the GDP growth rate in 2021-22 is likely to be overstated. Household consumption expenditure is shown as having increased in real terms by as much as 10 percent. This is completely contrary to trends at the ground level whereby households in Pakistan have Total Investment 4.7 2.5 had to cut back real consumption Export of Goods and 6.5 Services Import of Goods and 14.5 Services GDP at Market Prices 6.5 Source: PES spending in the face of high inflation. 8.4 A deeper look also reveals that some 15.6 sectoral growth rates are overstated. 6.2 The preliminary estimate of the GDP of 2021-22 is based primarily on data for the first nine months. Overall, the GDP growth rate in 2021-22 is unlikely to have approached 6 percent. It is more likely to be closer to 4.8 percent. Annexure-3 has been attached on Overstatement of the GDP growth rate in 2021-22 . 3.3 Investment Table 3.3 shows that total fixed investment has not been very buoyant in 2021-22, with an overall growth rate of only 2.5 percent. It also shows the trend separately in private, public and government investment. Table 3.3: Growth in real Private, Public Sector and Government Investment (%) 2020-21 2021-22 Private Sector 2.5-0.5 Public Sector 6.1-4.5 Government 14.0 18.5 It is not surprising that the level of private investment has declined in 2021-22 in the presence of rising interest rates. The SBP TOTAL Source: PES 4.7 2.5 policy rate reached the peak level of 13.75 percent by May 2022. Similarly, the investment level of public sector enterprises has contracted because of reduced access to funds. 41