ISLAMABAD, Jun 2 (APP): Despite several internal and external challenges, the country’s Gross Domestic Product (GDP) recorded eight years highest growth of 4.71 percent during the outgoing fiscal year (2015-16).
“The growth target would have been much better had there not been 28% negative growth in cotton production this year,” Finance Minister Senator Muhammad Ishaq Dar said while launching the Economic Survey of Pakistan for the outgoing fiscal year here Thursday afternoon.
The Finance Minister was flanked by Secretary Finance Division, Dr. Waqar Masood and other senior officials of the ministry.
The minister said that the cotton production decreased by 28% which inflicted loss of 0.5 percent to the country’s overall GDP growth.
The finance minister said that the performance of overall agriculture sector witnessed decline of 0.19 percent against the target of 3.9 percent, and the main cause that hit the
growth was low cotton production.
However, despite this decline, the GDP growth remained on growth path and increased to the eight years highest level.
The minister said the other sectors of economy performed well as the industrial sector witnessed growth of 6.8 percent compared to the growth of 4.81 percent during last year.
Similarly, the mining and Qurray sector witnessed increase of 6.8 percent compared to the growth of 3.97 percent.
Finance Minister Senator Muhammad Ishaq Dar, said that the construction grew by 13.10 percent compared to growth of 6.24 percent last year while services sector witnessed positive growth of 5.71 percent compared to 4.31 percent last year.
The minister said that the Current Account Deficit during July-April was recorded at $1.52 billion, 0.6 percent of GDP compared to $1.85 billion or 0.8 percent of GDP during last year.
The minister said that the workers remittances during July-April stood at $16.03 percent and expressed the hope that the target of $19 billion would be achieved this year.
Dar said that the Foreign Direct Investment (FDI) increased by 5.4 percent to $1.02 billion compared to $960 million last year.
This investment was made in power, oil and gas, financial services and communication sectors.
The Wholesale and Retail sector also witnessed positive growth of 4.57 percent compared to 2.3 percent last year, he said and attributed the growth to the improving law and order situation in Karachi, coupled with low inflation and monetary policy.
He said that the Finance and Insurance sector also grew by 7.84 percent, compared to 6.48 percent last year.
The minister said that the Railway earnings have also
witnessed increase of 13.8 percent during the current year
The Consumer Price Index for May 2016, he said, was recorded at 3.2 percent while from July-to May it was recorded at 2.8 percent.
The minister said that the inflation during the current fiscal year would remain below 3 percent which stood at 4.65 percent during the last year.
The minister said that Core Inflation on year-on-year basis stood at 4.56 percent and 4.13 percent during July-May (2015-16).
The minister said that the exports from the country declined by 9.6 percent in terms of prices, however in terms of quantity, the exports of various commodities increased.
He said that decline in international oil prices had affected the commodity market.
He said that the exports from the country during first ten months of the current fiscal year were recorded at $20.1 billion, compared to $18.1 billion during the same period of last year.
He said that the imports into country also witnessed decline of 4.6 percent, which is welcome sign.
The imports during the first ten months of the current fiscal year were recorded at $32.72 billion, compared to $34.32 billion during last year.
Talking about the next growth target, the minister said that after thorough deliberations, the growth target for the fiscal year 2016-17 have been fixed at 5.7 percent.
He said that for boosting the growth rate, the government would announce special package for agriculture sector during the budget to be announced on Friday, June 3.
Finance Minister, Ishaq Dar said the net borrowing of government sector reached at Rs.567.5 billion during Jul-May 06, FY 2016 as compared to an increase of Rs.539.4 billion in the same period of FY 2015.
He said the government retired Rs.59.8 billion to the State Bank of Pakistan during the period Jul-May 06, FY 2016 against the retirement of Rs.532.3 billion in the same period of FY 2015.
The Finance minister informed that the government was set to achieve the 4.3 percent target of fiscal deficit for FY16.
He said during first nine months of current fiscal year the fiscal deficit was recorded at 3.4 percent while it was 3.8 per cent during same period of last year.
The per capital income, he said also witnessed upward trend throughout the current government period as it went up from $ 1516.8 last year to the income of $1560.7 per person last year thus showing a 3 per cent growth.
Ishaq Dar said the country’s poverty ratio also witnessed impressive improvement as according to new method for determining poverty, the poverty rate stood at 29.5 per cent while it was 64 per cent 15 years ago if same method was applied.
Regarding revenue collection by FBR, the finance minister hoped that by the end of current fiscal year the set target of Rs 3104 billion would be achieved as during first 10 months of FY16 the revenue collection stood at Rs 2346.1 billion compared to the collection of Rs 1973 billion during same period of the preceding year.
He said the current account deficit was being maintained under one percent to GDP while in the past it used to be at over 2 per cent.
He said during first three months, the government’s main focus was to stabilize the dwindling economy which it had successfully done and now the government was adopting growth oriented policies and by FY18 the country’s GDP growth would be over 6 per cent.
To a question, the minister said that the government had no intention to continue with the International Monetary Fund (IMF) as the country had enough foreign exchange reserves which were sufficient to pay import bills of four months.
He informed that the 11th review with the IMF was going to complete by end of current month after which Pakistan would receive a tranche of $ 500 million.
The 12th review with the IMF, which he hoped would be the last one, would start in August and would end in September this year.
To another question Dar said that by law the withholding tax on the bank transactions of non-tax payers was 0.6 pe cent but Economic Coordination Committee of the Cabinet had authority to reduce it to 0.4 per cent.
He however was of the view that the government would not withdraw the withholding tax at any cost.