Average Pakistani income rose nearly 10 percent in two fiscal cycles

ISLAMABAD: Pakistan’s per capita income rose 6.4 percent to $1,629 in the current fiscal year of 2016/17 from $1,531 in the preceding fiscal year, an official document revealed on Thursday.

The per capita income grew 2.9 percent in 2015/16 over the preceding fiscal year. The ministry of finance will release the figure of per capita income along with the upcoming Economic Survey (2016-17) before the announcement of the budget for fiscal 2017-18. The survey is expected to be released on May 25, 2017 by the finance minister Ishaq Dar.

The document, available with The News, stated that the country’s economy is performing well on many accounts but “two key targets are showing stagnation or negative growth including investment and savings in terms of GDP ratios.” “Without promoting investment and savings, the growth trajectory will not remain long lasting.”

The economy grew at the rate of 5.28 percent in the current fiscal year against the projected rate of 5.7 percent. Though the government once again missed the growth target because of under performed industrial and services sectors, it is still the fastest pace of growth since 2006-07 when the GDP expanded by 6.8 percent. Size of Pakistan’s economy reached $304.4 billion in the current fiscal year

The per capita income has been calculated on the basis of projected population of 197.3 million for the current fiscal year of 2016-17 compared to the population size of 193.6 million in the previous year.

The document showed that the savings to GDP ratio has fallen to 13.1 percent of GDP in the fiscal 2016-17 against 14.3 percent of GDP during the previous year. However, the most worrisome aspect of the economy is a declining trend in private investment during the current financial year.

The document showed that investment to GDP ratio inched up in the outgoing fiscal year despite significant investment inflows from neighbouring China under the $57-billion China-Pakistan Economic Corridor (CPEC).

“At a time when the country is claiming for receiving billions of dollars in shape of CPEC but total investment in GDP term went up from 15.6 percent in 2015-16 to just 15.8 percent for the current fiscal year,” an official said. In absolute numbers, total investment stood at Rs 5,026 billion in 2016-17 against Rs 4,526.7 billion in the last fiscal year of 2015-16.

The country received $1.733 billion in foreign direct investment (FDI) during first 10 months of the current fiscal year of 2016/17, up 12.7 percent from a year earlier, as investment from Chinese companies continued to increase.

The State Bank of Pakistan said most of the new investments, in the July-April FY17, went into food processing, electronics and construction sectors. FDI from the Chinese companies rose 13 percent to $718.3 million in July-April FY17.

The government document showed that the fixed investment in GDP ratio increased to 14.2 percent during the ongoing fiscal year against 14 percent in the last fiscal year. The public investment in GDP terms also rose 4.3 percent in 2016-17 compared to 3.8 percent for the last financial year.

However, the private investment in GDP terms declined 9.9 percent in 2016-17 from 10.2 percent during the previous fiscal year. Similarly, the national savings in percentage of GDP has declined from 14.3 percent in 2015-16 to 13.1 percent in the ongoing financial year, registering negative growth. In absolute figures, the national savings stood at Rs 4,161 billion in 2016-17 against Rs 4,173 billion in fiscal 2015-16. 

This story was originally published in TheNews