Economic Survey: Govt says highest growth rate in 13 years

By
Mehtab Haider
|

ISLAMABAD: Planning Minister Ahsan Iqbal on Thursday, while unveiling the Economic Survey for the outgoing fiscal year (2017-18), said Pakistan had achieved the highest growth rate, 5.79 percent, in the past thirteen years.

The federal minister was addressing a press conference with Prime Minister’s Adviser on Finance Miftah Ismail.

The growth momentum had remained above 5 percent for the last two years in a row and reached 5.79 percent in FY2018, on account of a strong performance in agriculture, industry and services sectors which grew by 3.81 percent, 5.8 percent, and 6.43 percent, respectively, he said. 

“This is the highest growth rate in 13 years. We could have easily achieved a 6.1 percent growth rate had the country not faced political instability in the past year,” Iqbal added.

The federal minister further said that the growth rate figure was endorsed by the World Bank and other international organisations.

"Economics, I often say is not a homeopathic medicine that does not have side effects," said Iqbal. "We had the possibility to resolve the power crisis in eight years and that could have given us a more stable macroeconomic plan but we had no choice because we needed growth and opportunities for the youth."   

Responding to a question about the current government presenting its sixth budget when it was due to retire in June, Ismail said that it would be a dereliction of duty on the part of the Parliament to not present the budget. 

Planning Minister Ahsan Iqbal and Prime Minister’s Adviser on Finance Miftah Ismail pictured while addressing a press conference on Thursday, April 26, 2018. Photo: Geo News
 

"The budget, in which 95 percent of the expenditures will remain the same for the incoming government, is a set of measures and estimates. Its presentation is meant to help businesses and industries decide their future course," said the finance adviser. 

"We know full well that the assemblies will dissolve on May 31. The incoming government can modify the budget according to its own strategies but the federal government has to define the country’s fiscal policy for one year." 

Ismael further added that the budget of provinces had little impact on the country's fiscal policy, as the former was allocated from the revenues of the federal government. The chief ministers of Sindh, Khyber Pakhtunkhwa and Balochistan had walked out of a meeting of the National Economic Council on Tuesday, after recording reservations over new development schemes. The ministers had said that the incumbent government could not design the Public Sector Development Programme (PSDP) for the next fiscal year, as it would complete its term in May. 

The finance adviser said the development budget for ongoing projects was set at 80 percent, while Rs100bn had been reserved for the incoming government.  

"The amount reserved for the incoming government's development budget is a leverage that we had not even afforded to ourself," he said.

Important takeaways


⯈Highest growth rate of 13 years, 5.79%, achieved

⯈Highest agriculture growth rate of 3.81% in 13 years

⯈Highest industrial sector growth of 5.8% in 10 years

⯈Highest recorded manufacturing growth of 6.24% in 11 years 

11,000MW added to the power grid

⯈Services sector growth rate reaches 6.43%

⯈Inflation rate brought down to 3.8%

⯈13% increase in imports till March

GDP grows from Rs22,000bn to Rs34,000bn



Agriculture growth exceeded the target of 3.5 percent to reach 3.81 percent. Last year’s agriculture growth was 2.07 percent. Similarly, Large Scale Manufacturing (LSM) also recorded a growth of 6.13 percent — the highest in ten years,  according to the Pakistan Economic Survey 2017-18.

Industrial sector growth also improved to 5.8 percent, highest in ten years. Manufacturing grew to 6.24 percent, the highest recorded in 11 years. 

The performance of services sector witnessed a stable growth of 6.43 percent in last two years.

Public Debt

Total public debt stood at Rs 22,820 billion at end December 2017 while total debt of the government was Rs 20,878 billion. Total public debt recorded an increase of Rs 1,413 billion during first six months of the current fiscal year. 

Energy

The government remained successful in developing energy-related projects through indigenous energy resources such as coal, hydro and renewable sources, said the survey. Since FY2014, the share of government in Fixed Investment (GFCF) has increased significantly especially in Electricity Generation and Distribution & Gas Distribution. Thirty-five projects with cumulative capacity of 12,230 MW have been added.