ISLAMABAD  -   National Economic Council (NEC) would meet on May 29 to give final nod to the development budget and macroeconomic framework for the next fiscal year (FY2020).

The Annual Plan Coordination Committee (APCC) on Thursday approved the development budget and the macroeconomic framework for fiscal year 2019-20. The plan would now be tabled before the NEC – the constitutional body responsible for macroeconomic planning – for its formal endorsement. Prime Minister Imran Khan would chair the meeting of NEC on May 29, which would be attended by four provincial chief ministers and federal ministers.

According to the agenda of the meeting, the meeting would review the Annual Plan 2018-2019 and the proposed Annual Plan 2019-2020, (ii), the draft of five years plan 2018-2023, (iii), review of Public Sector Development Programme (PSDP) 2018-2019 and the proposed the PSDP 2019-2020 (iv) progress report of the CDWP and ECNEC from 1st April 2018 to 31st March 2019 (v) time extension for special forum of rehabilitation and reconstruction of FATA emerged areas (vi) National Social Protection Policy Framework (vii) establishment of Islamabad Development Working Party.

The APCC has proposed the size of the national development outlay at Rs1.837 trillion with provincial contribution of Rs 912 billion. The government put the federal development programme at Rs925 billion which included PSDP unchanged at last year’s Rs675 billion and an unexplained block allocation of Rs250b as ‘alternative financing’ to be raised through private sector financing.

Out of total Federal PSDP of Rs675 billion Rs100 billion are in block allocations while the remaining Rs575 billion are proposed for the developmental projects and ERRA. Of the development budget of Rs 575 billion Rs375.1 billion will be funded from the PSDP while Rs199.36 billion will be funded by corporations. The block allocation includes Rs32.5 billion for TDPs, Rs32.5 billion for security enhancement, Rs10 billion for PM’s Youth Skill Development initiative, Rs2 billion for Clean Green Pakistan Movement, RS1 billion for Gas Infrastructure Development Cess and Rs22 billion for merged areas 10 years development plan. Of the Rs370 billion for the ministries and divisions allocated for the developmental projects the major portion of Rs84.72 billion will go to water sector.

The APCC has also proposed macro-economic targets for the next fiscal year (2019-20). For the next fiscal the APCC set GDP growth target at 4 percent target, agriculture growth target 3.7 percent, industrial growth target 2 percent and services 4.7 percent. Average inflation rate for the next fiscal year is projected at 8.5 percent. Macroeconomic targets for the next fiscal year show that exports will grow at a pace of 6 percent and the export target has been set at nearly $26 billion. Imports have been projected to stay slightly above $54 billion, higher by nearly 1% over the revised projections for the outgoing fiscal year. As a result, the government expects to keep the trade deficit restricted at $28.2 billion in the new fiscal year.

The government has set the investment-to-GDP ratio at 15.8%, marginally higher than the outgoing fiscal year’s 15.4%. Fixed investment will also not see any major change and the government projects it will be around 14.2% at the end of the next fiscal year. Public investment has been projected to grow slightly to 4.1% of GDP in fiscal year 2019-20. National savings rate is set at 12.8% for fiscal year 2019-20.

The NEC would give final approval to the recommendations of the APCC.