ISLAMABAD:
Federal Minister for Finance Senator Ishaq Dar has conceded that the
government has missed major economic targets of GDP growth, revenue,
investment and inflation in the outgoing year.
The GDP growth remained at 4.14 percent against a target of 4.4 percent but in the last six years, this is the first time that Pakistan registered over 4 percent growth against the revised target of 3.7 percent, taking the per capita income up to $1,386 in 2013-14 from the revised target of $1,369 in 2012-13. Tax collection remained at 16 percent and inflation increased by 8.5 percent and unemployment registered an increase of 6.2 percent.
Announcing the results of the Economic Survey at a news conference, the finance minister said in the first year of its rule, the government spent its time in fire fighting and in the second financial year, which is 2014-15, the masses will be witnessing dividends of the prudent economic policies.
The minister said that he himself fixed the aggressive economic targets for 2013-14 so that the government could not remain complacent and because of hard work and good economic governance, the government had performed well in terms of achieving the GDP growth of 4.14 percent.
He vowed to increase the GDP growth by 1 percent every year and said that the size of the GDP had swelled close to $300 billion. The minister said the unemployment rate had increased to 6.2 percent from 5.9 percent from 2009-10. He stated that the impact of the war against terrorism remained at $102 billion and 50 percent of the population was living below the poverty line of $2 a day income.
“The vulnerable segments of the society will be taken care of and it was I who first proposed the Benazir Income Support Programme as target subsidy to provide solace to the poorest of the poor. The last government in five years time increased the BISP allocation from Rs34 billion to just Rs40 billion,” he said.
However, the government has increased the allocation under the Benazir Income Support Programme to Rs75 billion in the current financial year, which will be increased further in the next budgetary year. Next year, the government will provide financial help to 4,700,000 poor people.
Coming to the GDP growth analysis, the minister said that the overall industrial growth remained at 5.84 percent in the first nine months against 1.37 percent in the same period of the last year. He said the Large Scale Manufacturing (LSM) sector grew by 5.31 percent as against 4.1 percent last year.
The construction sector grew tremendously by 11.3 percent in the first nine months of the current financial year as against the negative growth of 1.7 percent in 2012-13.
Electricity generation and gas distribution sector grew by 3.72 percent against the negative growth of 16.3 percent in the last financial year. “This has really helped increase growth of the industrial sector.” He said growth in small and household sector stayed at 8.4 percent against the growth of 8.3 percent in the same sector last year.
However, the Economic Survey said during 2013-14, energy consumption was 40,185 million TOEs compared to 40,026 million TOEs in 2012-13 showing a growth of 0.4 percent. Now the industrial growth could be questioned with an increase in electricity consumption by 0.4 percent.
However, the minister admitted the agriculture sector growth remained very low at just 2.1 percent against 2.88 percent last year. However, in the next budgetary year, the government will come up with alluring incentives to increase the growth in agriculture sector.
Dar said the growth in important crops remained at 3.7 percent as against 1.2 percent last year. Other crops that included oil seeds and pulses showed negative growth at 3.5 percent as against 6.1 percent last year. He said that the country also witnessed a reduction in growth as cotton production remained at 12.77 million bales against 13.03 million bales.
The minister said that for agriculture sector, the government allocated Rs380 billion for the current year against Rs315 billion last year. Next time the government will increase the credit lines for the agriculture sector. He also mentioned that fertilisers also remained short and the government had somehow managed to provide the imported fertilisers at Rs1,786 per bag plus Rs25 of dealers margin. “We brought down the prices of fertiliser from Rs1,952 per bag to Rs1,786,” he said.
Mentioning the services sector, the minister said that this sector failed to perform up to the expectations as it grew by 4.3 percent against the growth of 4.9 percent in the last financial year.
In transport, storage and communication sector, the growth remained at 3 percent against 2.9 percent, in wholesale and retail trade 5.2 percent against 3.4 percent, finance and insurance 5.2 percent against 9 percent, housing services remained at 4 percent against 4 percent last year and growth in general government services tumbled by 2.2 percent against 11.3 percent and in other private sector, the growth stayed at 5.8 percent as against 5.2 percent.
About inflation, the minister said that during the July-April period, it remained at 8.8 percent against 7.75 percent last fiscal. However, till May this year, inflation remained at 8.6 percent as against 7.5 percent. About the core inflation which he termed very important saying it remained at 8.2 percent against 9.7 percent in 11 months of the outgoing fiscal.
The minister also said that government borrowing had reduced and the monetary policy had improved. Highlighting the exports of the country, he said that exports had increased by 4.24 percent to $21 billion in the last 10 months against $20.1 billion in thesame period last year and because of the GSP Plus, the textile sector grew by 7 percent and raw cotton export 42 percent. However, it would have been better if the value addition had been added and finished products exported instead of exporting raw cotton. However, the imports, the minister said, had increased by 1.2 percent to $37.1 billion from $36.7 billion in 2012-13. Dar mentioned the reason for the increase in exports saying that plants and machinery had been imported on a large scale, which is in a way a positive sign for growth in economy.
Investment to GDP has reduced to 13.99 percent from 14.57 percent of GDP last year. Fixed investment has also tumbled to 12.39 percent of the GDP against 12.79 percent. Out of this, the private investment remained at 8.94 percent against 9.64 percent of GDP. Dar said that total investment was recorded at Rs3,276 billion in 2012-13, which increased to Rs3,554 billion in 2013-14. The minister said that Foreign Direct Investment (FDI) had reached $2.979 billion that also included the $2 billion Euro Bond. However, in the last year in the same period it stood at $1.277 billion.
Talking about the foreign exchange reserves, the minister said that reserves had reached $13.66 billion against $11.4 billion. He mentioned in February last year, the reserves stood at just $7.5 billion out of which the central bank reserves were at $2.7 billion. Now the situation had completely changed as right now the State Bank of Pakistan reserves had reached $8.8 billion whereas the reserves of commercial banks were stagnant at $4.8 billion.The growth in remittances has slightly reduced to $12.894 billion from $13.921 billion.
The GDP growth remained at 4.14 percent against a target of 4.4 percent but in the last six years, this is the first time that Pakistan registered over 4 percent growth against the revised target of 3.7 percent, taking the per capita income up to $1,386 in 2013-14 from the revised target of $1,369 in 2012-13. Tax collection remained at 16 percent and inflation increased by 8.5 percent and unemployment registered an increase of 6.2 percent.
Announcing the results of the Economic Survey at a news conference, the finance minister said in the first year of its rule, the government spent its time in fire fighting and in the second financial year, which is 2014-15, the masses will be witnessing dividends of the prudent economic policies.
The minister said that he himself fixed the aggressive economic targets for 2013-14 so that the government could not remain complacent and because of hard work and good economic governance, the government had performed well in terms of achieving the GDP growth of 4.14 percent.
He vowed to increase the GDP growth by 1 percent every year and said that the size of the GDP had swelled close to $300 billion. The minister said the unemployment rate had increased to 6.2 percent from 5.9 percent from 2009-10. He stated that the impact of the war against terrorism remained at $102 billion and 50 percent of the population was living below the poverty line of $2 a day income.
“The vulnerable segments of the society will be taken care of and it was I who first proposed the Benazir Income Support Programme as target subsidy to provide solace to the poorest of the poor. The last government in five years time increased the BISP allocation from Rs34 billion to just Rs40 billion,” he said.
However, the government has increased the allocation under the Benazir Income Support Programme to Rs75 billion in the current financial year, which will be increased further in the next budgetary year. Next year, the government will provide financial help to 4,700,000 poor people.
Coming to the GDP growth analysis, the minister said that the overall industrial growth remained at 5.84 percent in the first nine months against 1.37 percent in the same period of the last year. He said the Large Scale Manufacturing (LSM) sector grew by 5.31 percent as against 4.1 percent last year.
The construction sector grew tremendously by 11.3 percent in the first nine months of the current financial year as against the negative growth of 1.7 percent in 2012-13.
Electricity generation and gas distribution sector grew by 3.72 percent against the negative growth of 16.3 percent in the last financial year. “This has really helped increase growth of the industrial sector.” He said growth in small and household sector stayed at 8.4 percent against the growth of 8.3 percent in the same sector last year.
However, the Economic Survey said during 2013-14, energy consumption was 40,185 million TOEs compared to 40,026 million TOEs in 2012-13 showing a growth of 0.4 percent. Now the industrial growth could be questioned with an increase in electricity consumption by 0.4 percent.
However, the minister admitted the agriculture sector growth remained very low at just 2.1 percent against 2.88 percent last year. However, in the next budgetary year, the government will come up with alluring incentives to increase the growth in agriculture sector.
Dar said the growth in important crops remained at 3.7 percent as against 1.2 percent last year. Other crops that included oil seeds and pulses showed negative growth at 3.5 percent as against 6.1 percent last year. He said that the country also witnessed a reduction in growth as cotton production remained at 12.77 million bales against 13.03 million bales.
The minister said that for agriculture sector, the government allocated Rs380 billion for the current year against Rs315 billion last year. Next time the government will increase the credit lines for the agriculture sector. He also mentioned that fertilisers also remained short and the government had somehow managed to provide the imported fertilisers at Rs1,786 per bag plus Rs25 of dealers margin. “We brought down the prices of fertiliser from Rs1,952 per bag to Rs1,786,” he said.
Mentioning the services sector, the minister said that this sector failed to perform up to the expectations as it grew by 4.3 percent against the growth of 4.9 percent in the last financial year.
In transport, storage and communication sector, the growth remained at 3 percent against 2.9 percent, in wholesale and retail trade 5.2 percent against 3.4 percent, finance and insurance 5.2 percent against 9 percent, housing services remained at 4 percent against 4 percent last year and growth in general government services tumbled by 2.2 percent against 11.3 percent and in other private sector, the growth stayed at 5.8 percent as against 5.2 percent.
About inflation, the minister said that during the July-April period, it remained at 8.8 percent against 7.75 percent last fiscal. However, till May this year, inflation remained at 8.6 percent as against 7.5 percent. About the core inflation which he termed very important saying it remained at 8.2 percent against 9.7 percent in 11 months of the outgoing fiscal.
The minister also said that government borrowing had reduced and the monetary policy had improved. Highlighting the exports of the country, he said that exports had increased by 4.24 percent to $21 billion in the last 10 months against $20.1 billion in thesame period last year and because of the GSP Plus, the textile sector grew by 7 percent and raw cotton export 42 percent. However, it would have been better if the value addition had been added and finished products exported instead of exporting raw cotton. However, the imports, the minister said, had increased by 1.2 percent to $37.1 billion from $36.7 billion in 2012-13. Dar mentioned the reason for the increase in exports saying that plants and machinery had been imported on a large scale, which is in a way a positive sign for growth in economy.
Investment to GDP has reduced to 13.99 percent from 14.57 percent of GDP last year. Fixed investment has also tumbled to 12.39 percent of the GDP against 12.79 percent. Out of this, the private investment remained at 8.94 percent against 9.64 percent of GDP. Dar said that total investment was recorded at Rs3,276 billion in 2012-13, which increased to Rs3,554 billion in 2013-14. The minister said that Foreign Direct Investment (FDI) had reached $2.979 billion that also included the $2 billion Euro Bond. However, in the last year in the same period it stood at $1.277 billion.
Talking about the foreign exchange reserves, the minister said that reserves had reached $13.66 billion against $11.4 billion. He mentioned in February last year, the reserves stood at just $7.5 billion out of which the central bank reserves were at $2.7 billion. Now the situation had completely changed as right now the State Bank of Pakistan reserves had reached $8.8 billion whereas the reserves of commercial banks were stagnant at $4.8 billion.The growth in remittances has slightly reduced to $12.894 billion from $13.921 billion.
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