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Pakistan Economic Survey 2015-16: Govt misses several targets

ISLAMABAD: Minister of Finance Ishaq Dar on Thursday unveiled the Pakistan Economic Survey for the fiscal year 2015-16, indicating missed target of the GDP growth rate at 4.71% against a conceived target of 5.5%.

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The minister was quick to highlight poor performance of the agriculture sector contributing to missed GDP growth rate target.

Why GDP growth target was missed?

The government had also missed the GDP growth rate target last year, recording at 4.2% against a set target of 5.1%.

Elaborating details of the economic survey here at a presser, Dar hastened to add that the government was taking measures to improve the GDP growth rate.

He underlined that decrease in cotton crop production up to 28% was a major setback for the GDP growth rate.

Finance Minister said country’s foreign exchange reserves achieved new record of $21.6 billion on 30th of May this year.

GDP news

Dar said development rate in finance, insurance sector was recorded at 7.1%. He also highlighted that agriculture growth rate target also could not be met.

Gas and electricity production rate stood at 12.3% last year, while the same was recorded 11.81% this year, he added. Performance of the railway sector improved in the last nine months, he added.

The finance minister said agriculture growth rate was pitched at 3.9%, but it could not be achieved due to destruction of cotton crop.

 

Inflation remained under control

inflation rate

 

The minister said the inflation remained under control as government pursued a firm monetary policy leading to lower spending/demand and higher savings.

Fiscal deficit

Dar described the fall of exports, resulting in missed fiscal deficit target.  Exports went down to $18.18 billion. The decrease in commodity and oil prices kept the return at low.

The industries sector surpassed its estimated growth target of 6.4pc and the services sector achieved its targeted growth.

Services sector

In services sector, a 11.13% growth was recorded in general government services against the target of 6%. Services had registered growth 4.9% last year.

Public Sector Development Programme (PSDP) Rs700bn allocations, only Rs429bn was disbursed for development projects compared to Rs349bn of the total Rs535bn allocated to the PSDP last year.

Tax revenue

The government had planned to push Tax-to-GDP ratio to 12.5pc (to collect Rs 3.4 trillion), but it actually achieved 8.4% (Rs 2.3 trillion could be collected) in the current fiscal year.

The problem is exacerbated because only 0.45pc of the total population filed a tax return, which corresponds to just 15pc of the potential tax base.

Education and employment

Unemployment witnessed a slight decrease in the current fiscal from 6% in 2014 to 5.9% in 2015.

The government spent 1.67% of the GDP on education last year.

Cost of war on terror

The Finance minister said the war on terror cost Pakistan US $ 118 billion since 9/11 attacks. He said anti-terror operations were going on successfully across the country.

He highlighted that losses inflicted in the war on terror during the outgoing fiscal year cost $ 9.4 billion.

Import, export, remittances

Ishaq Dar said exports stood at 18.18 billion dollars and imports at 32.70 billion dollars during first ten months of the current financial year.

“Remittances by Overseas Pakistanis stood at 16.3% in ten months and foreign direct investment increased by 5.4%. Most of the FDI went to electricity and gas sectors.”

Achievements

He said Stock market index crossed 36,000 points.

“Industrial growth stood at 6.8% as against revised target of 4.81% of last year. Large-scale manufacturing registered growth of 4.61% as against 3.29% last year,” he said.

The minister said major improvement was shown by automobile sector which grew by 23.4% followed by fertilizer 115.9%, leather products 12%, rubber products 11.7%, cement 10,4%, chemicals 10% and fertilizer 7.2%. Construction sector also registered 13.10% increase as compared to last year’s growth of 6.24%.

The finance minister said country’s foreign exchange reserves achieved new record of 21.6 billion dollars on 30th of May this year.

He said rupee-dollar parity is stable and per capita income stood at 1560.7 dollar.

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