Business

GDP growth to miss target this year

ISLAMABAD: Pakistan’s federal cabinet approved Budget Strategy Paper (BSP) for the year 2016-17 with economic growth rate target 6.5 percent.

Finance Minister Ishaq Dar in his briefing to the cabinet said that the target of the tax revenue for the next fiscal year has been fixed at 3700 billion rupees, which is 19 percent more than this year. New taxes of around 100 billion will be imposed in the new financial year.

Around Rs1.497 trillion will be allocated for the development budget, fiscal deficit will be reduced to four per cent of gross domestic product (GDP), while the inflation will be restricted to six percent.

Dar conceded that GDP growth rate will miss this year’s target of 5.5 percent due to severe setback to the cotton crop.

According to the budget estimates inflation to touch six percent during this fiscal year and will remain stagnant at the same rate over the next two years.

The finance minister also said the fiscal deficit limit to be restricted to 4.3pc of GDP during FY16 and scale it down to 4pc next year and 3.5pc in fiscal year 2017-18.

The total public sector investment would involve an expenditure of Rs210bn on energy and Rs470bn on infrastructure, while the social sector would consume about Rs545bn which would mostly be funded by the provinces.

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