ISLAMABAD - The government on Thursday launched the Economic Survey 2017-18 revealing that economy has shown a better performance, though government missed on most of the key targets.

It showed that the targets of inflation, exports, agriculture and services sector had been successfully achieved.

The performance in some major areas like GDP growth, budget deficit, industrial growth, savings and investments and tax collection remained below the mark but it was not too disappointing.

“The GDP growth rate has recorded at 5.8 percent, which is highest in last 13 years,” said Planning and Development Minister Ahsan Iqbal at the launching of the survey.

“The GDP should have exceeded the target of 6 percent had the country not been in a political crisis and uncertainty during last year,” claimed Ahsan, who was flanked by PM’s Finance Adviser Miftah Ismail, Revenue Minister Haroon Akhtar and State Finance Minister Rana Afzal Khan.

The government’s economic team drew the comparison of economic situation of the outgoing fiscal year with the situation when the PML-N government took charge in 2013.

Ahsan Iqbal termed the survey ‘a scorecard’ of the present government. He said the government has vigorously pursued 4Es strategy: focusing on energy, economy, eradication of extremism and education.

The government has successfully achieved the results, as power loadshedding has controlled, economic situation improved, number of terror incidents reduced and budget for the higher education has also enhanced in last five years, he added.

Providing an insight into the economic performance, Adviser Miftah Ismail said that the agriculture sector – the mainstay of most of Pakistanis’ income – has also achieved 13 years highest growth of 3.8 percent.

Likewise, he said, the manufacturing sector’s growth was registered at 5.8 percent, highest in 10 years. And, the large scale manufacturing’s growth has achieved 11 years highest growth of 6.25 percent in FY 2018.

Inflation rate would remain at around 4.5 percent by the end of the current fiscal year, Miftah added.

He informed that budget deficit has been projected at 5.5 percent of the GDP during FY 2018 that was 8.2 percent of the GDP when the incumbent government took charge in 2013.

Tax collection of the Federal Board of Revenue (FBR) has doubled to Rs3,935 billion this year as compared to Rs1,946 billion in 2013, the adviser said.

The net public debt would increase to 61.4 percent of the GDP in FY 2018 from 60.2 percent of the GDP of 2013. However, external debt has reduced to 20.5 percent of the GDP from 21.4 percent of the GDP, he held.

Miftah said that exports, which were depleting in last three years, had started to increase. Exports had increased by over 24 percent in March 2018 over a year ago. Exports are increasing due to the recent rupee depreciation against US dollar.

 

 

‘Full budget’

Rejecting opposition parties’ demand for a short time budget ahead of the elections, the PM’s adviser said that government could not make decisions for a period of three months in the areas that require a yearly format.

He asked how they could increase salaries for three months, tell India to stop LoC firing for three months, and reduce taxes for three months. “That is not how economics works,” he said.

The government has kept Rs100 billion under Public Sector Development Programme for the new government, he said.

After assuming power following the general elections, the new government can amend the decisions made by the outgoing PML-N government, Miftah explained.

He also said that irrespective of their political position over the budget issue, all the provincial governments would present full year’s budget at the end of the day.

To a question about increase in debt, Miftah said that public debt has enhanced to Rs21 trillion from Rs14 trillion as Pakistan’s GDP has increased by $12,000 billion.

He said that current account deficit is widening due to the massive increase in imports from last couple of years. However, he hoped that current account deficit would be controlled due to increase in exports and remittance.

 

 

Govt achievements

Earlier, Ahsan Iqbal said that the government has added 11,000 megawatt electricity to the national grid during the last five years, which helped overcome the energy crisis.

Around 1,750km motorways and roads have been constructed in last five years, which has made Pakistan the largest infrastructure economy in South Asia.

He further said that imports had increased due to machinery import in the wake of mega projects undertaken under China-Pakistan Economic Corridor and increase in demand of appliances due to improvement in purchasing power.

The Planning and Development minister said the government had started the projects under the CPEC. Out of total $46 billion, $29 billion would energise in short run and used to build roads and infrastructure.

He said that development budget has increased to Rs1,000 billion in 2018 from Rs300 billion in 2013. The Higher Education Budget has also enhanced to Rs47 billion from Rs13 billion.

Ahsan said that poverty has reduced to 24.3 percent in 2016 from 29.5 percent. He further said that the UNDP and OXFORD conducted a survey in Pakistan, which showed that poverty is gradually declining in the country in last 10 years.

 

 

Targets

The Economic Survey showed that the government would miss the budget deficit target by a wide margin due to lower tax collection and increase in expenditures. The deficit is likely to go beyond the target of 4.1 percent of the GDP (Rs1.48 trillion) by the end of June 2018.

Pakistan’s budget deficit had estimated to reach 5.5 percent of the GDP (Rs1.96 trillion) during FY2018 Tax collection is another failure of the government during current financial year. The government had estimated that FBR would collect Rs3,935 billion as against the ambitious target of Rs4,013 billion for the FY2018.

Industrial sector would miss the target of 7.3 percent, as it is expected to remain at around 5.8 percent during ongoing financial year. In manufacturing sector, mining and quarrying grew by 3.04 percent.

Large scale manufacturing sector recorded growth of 6.13 percent as compared to the target of 6.3 percent and small scale manufacturing sector would grow by 8.18 percent against the target of 8.2 percent during ongoing financial year 2017-2018.

The electricity and gas generations and distributions have recorded growth of 1.84 percent and construction sector would record massive growth of 12.05 percent during ongoing financial year.

The agriculture sector growth has recorded at 3.8 percent during FY2018 as against the target of 3.5 percent. Crops recorded growth of 3.83 percent.

The growth in production of three important crops namely rice, sugarcane and cotton is estimated at 8.7 percent, 7.4 percent, and 11.8 percent respectively. Decline in production has been estimated in Wheat and Maize at 4.4 percent and 7.1 percent respectively.

Fishing recorded a growth of 1.63 percent against the target of 1.7 percent, forestry 7.17 percent as compared to the target of 10 percent, livestock 3.76 percent against the target of 3.8 percent.

The services sector has achieved the target of 5.4 percent during present fiscal year. In this sector, wholesale and retail trade recorded growth of 7.51 percent against the target of 7.2 percent.

Transport, storage and communication would miss the target of 5.1 percent, as it would record growth of 3.58 percent and finance and insurance will grow by 6.13 percent as compared to the target of 9.5 percent during outgoing fiscal year.

The government would achieve the inflation target of 6 percent. The inflation is likely to remain at below 4 percent during current fiscal year.

The Economic Survey also showed that government had missed the target of enhancing investment to GDP to 17.2 percent, as it remained at around 16.4 percent during FY2018.

Similarly, Savings had recorded at 11.4 percent of GDP – far below the target of 14.6 percent.

 

 

Economy set to record fastest growth in 13 years