Islamabad (April 26, 2018): Federal Minister for planning and development Ahsan Iqbal and PM’s Advisor for Economic Affairs Miftah Ismail claim that PML N Government has maintained the economic pace in modest way in its tenure.
Presenting Economic Survey of Pakistan in a press conference in Islamabad Ahsan Iqbal said that the gross domestic product (GDP) grew at a rate of 5.8 per cent over the past year, narrowly missing the PML-N’s manifesto target of at least 6pc,.
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“We would have achieved 6.1pc without political turmoil,” he explained. “This is compared to an average of 3pc GDP growth” before the PML-N came to power in 2013.
“Energy, economy, elimination of extremism and education were the ‘four Es’ that we had discussed in our manifesto,” Iqbal said.
“We created two plans ─ one was an immediate plan, the other was our Vision 2025,” he explained.
The PML-N government faced “major constraints and bottlenecks as a development framework was not present,” he said.
Despite this, the government had, over the last five years, allocated Rs47 billion to higher education, built 1,750 kilometres in motorways, and added 11,000 MegaWatts to the power grid.
“We have used our own budget to curb terrorism, financing Operations Zarb-i-Azb and Raddul Fasaad,” he said.
The Economic Survey 2017-18 incorporates the latest figures incurred in the war against terror. Pakistan’s total losses after becoming part of the war might have crossed the $125 billion mark in the last 17 years as it stood at $123.13 billion till 2016-17.
“The China-Pakistan Economic Corridor is a reality today. Of a total investment of $46bn, $39bn is being used to build roads and infrastructure.”
“We have used our own budget to curb terrorism, financing Operations Zarb-i-Azb and Raddul Fasaad,” he said.
The fiscal deficit in the first six months of FY17-18 was restricted to 2.3pc of the GDP compared to 2.5pc during the corresponding period last year due to strong growth in revenues relative to expenditures, according to the PES 17-18.
The gross domestic product (GDP) grew at a rate of 5.8 per cent over the past year, Iqbal revealed, narrowly missing the PML-N’s manifesto target of at least 6pc.
“We would have achieved 6.1pc without political turmoil,” he explained. “This is compared to an average of 3pc GDP growth” before the PML-N came to power in 2013.
The momentum of growth remained above 5pc for the last two years running, reaching a 13-year high of 5.8pc in FY17-18 on the back of “strong performance in the agriculture, industrial and service sectors”, Iqbal said.
Agriculture grew at a rate of 3.81pc, while industries and services grew 5.8pc and 6.43pc respectively, he announced.
The agri sector, saw the highest growth over the last 13 years, Iqbal said, explaining that the growth was achieved “on the back of initiatives such as expansion in credit to the sector, along with the Kissan Package, provision of better quality seeds including hybrid and high-yield varieties, and timely availability of agriculture inputs such as fertiliser, pesticides, etc.”
He added: “We are investing in technology so that we are ready for the fourth industrial revolution.”
Large Scale Manufacturing (LSM) registered growth of 6.13pc, the highest in 10 years, the PM’s financial adviser Miftah Ismail revealed. Manufacturing grew by 6.24pc, the highest in 11 years, he said.
The services sector has seen stable growth of 6.43pc over the last two years, Ismail added.
Average inflation from July-March in FY17-18 was contained at 3.78pc, lower than the 4.01pc observed during the same time period last year, Ismail said.
The PML-N had vowed to restrict inflation to a single digit between 7-8pc.
“A moderate outlook of food prices amid abundant grain stocks and the recent increase in policy rate will help in containing the average inflation below target of 6pc during FY 2018,” according to the PES.
“During the current fiscal year FY17-18, CPI increased to 4.6pc which was the highest since the start of current fiscal year. In January 2018 it was came down to 4.4pc and in March 2018, it fell to an eight-month low at 3.2pc on account of subdued food prices which offset the impact of rise of petroleum prices,” the PES reads.
TRADE
“The current fiscal year has seen continued exports growth in all nine months,” Iqbal said.
Exports increased by 12pc while imports have slowed down to 16.6pc as compared to 48pc at the start of current financial year, he added.
The PES said that exports from July-March in FY17-18 had reached $17.1bn, compared to $15.1bn in the corresponding period last year, registering 13.1pc growth.
Imports grew 15.7pc during the same period, rising from $38.37bn in FY16-17 to $44.38bn this year, registering an increase of $6.01bn in absolute terms, the PES said.
“To slow down imports, an additional regulatory duty was imposed to curtail the inflated imports,” the document said.
The balance of payments remained stressed due to rising imports of capital equipment and fuel this fiscal year, while a recovery in global oil prices “also played a role in pushing up the import bill”, the PES said.
The growth in export earnings and remittances was insufficient to overcome the current account deficit, it said.
Remittances registered significant growth of 3.6pc during in FY17-18 so far, against a decline of 2pc last year, reaching $14.6bn in the first nine months of the current fiscal year, compared to $14.4bn over the same period last year, according to the PES.
“The trend will continue in coming months and it is expected that the target of $20.6bn will be achieved,” the PES said.
Forex reserves declined by $4.5bn this year.
“Pakistan’s current account deficit contracted by 9.2pc on a month-on-month basis in March 2018 and reached $1.16bn compared to $1.28bn in February 2018. However, the current account deficit widened by 50.5pc and reached $12.03bn (3.8pc of GDP) during July-March FY17-18,” according to the PES.
“This was mainly due to 20.7pc widening in the trade deficit, amounting to $22.3bn. The widening of trade deficit is mainly due to a surge in the import bill by 16.6pc, reaching $40.6bn,” the PES said.
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