ISLAMABAD: The federal government once again missed the economic targets, including GDP growth, however, some positive indicators were also seen during the fiscal year 2014-15.
Federal Finance Minister Ishaq Dar, while launching the Economic Survey 2014-2015, said that the government could not achieve the GDP target of 5.1 percent, as it remained at 4.24 percent. However, he said that growth rate is highest in last seven years.
The minister said the country suffered losses worth $107 billion due to war on terror from 2001 to 2015. This year’s estimates are $4.5 billion as against $6.6 billion last year. The losses due to war on terror reduced during outgoing year as government launched Zarb-e-Azb and Karachi operations, he added.
The government has also failed to achieve other major targets like that of agriculture, industry and services sector during outgoing financial year. The agriculture sector grew by only 2.9 percent during outgoing financial year, far below the target of 5 percent. The services sector fell short of the 5.2 percent target and notched up 4.95 percent growth. The industrial sector recorded growth of 3.62 percent during outgoing fiscal year as against the target of 6.8 percent.
The financial wizards however were enthralled with the sharp growth in per capita income that rose by 9.25 percent to $1,512 during the fiscal year, as against $1,384 in June last year. “The main contributing factors of this rapid increase in per capita income include acceleration in real GDP growth, relatively lower growth in population and the consistent Pakistani rupee,” Dar said.
Pakistan was able to significantly cut its current account deficit to 0.6 percent of GDP from 1.3 percent last year for the first 10 months of the current fiscal. Current account deficit during first ten months of the year was $1.36 billion as against target of $2.82 billion for the whole year. The financial year also saw some other significant achievements as interest rates were curtailed from 10 to seven percent, a 42-year low on the back of historic 4.8 percent inflation.
Then, there has been 16 percent increase in remittances by Overseas Pakistanis in the first ten months of this year as against same period last year. The remittances recorded at $14.97 billion in ten months. Tax to GDP ratio is expected increase to 11.1 percent during outgoing fiscal year from 10.2 percent of the previous year. Credit to private sector has been reduced to Rs162 billion from Rs371 billion.
Foreign investment in first ten months of the year was $2.60 billion as against $3.11 billion same period last year. Foreign exchange reserves stood at $16.73 billion yesterday and they are expected to $cross 17 billion today (Friday). Exchange rate in June last year was 102.86 rupee a dollar whereas the interbank rate yesterday was 101.88 rupee.
Ishaq Dar said that the government would curtail the inflation rate at below five percent by the end of June 2015, as it remained at 4.65 percent during eleven months (July-May) against 8.66 percent of the corresponding period of previous year. Dar attributed several reasons behind controlling inflation that included stability in rupee, zero borrowing from State Bank of Pakistan, improved foreign reserves situation and effective monetary policy.
The finance minister said that the government would achieve the budget deficit target of 4.9 percent of the GDP by the end of outgoing financial year. He also hoped that FBR would achieve its revise target of Rs2,605 billion by the end of June 2015.
He said exports yielded $20.18 billion during July-April of the outgoing financial year as against $20.83 billion of the same period last year, showing decline of three percent. The exports target for the entire fiscal year is $27 billion, which is difficult to achieve. Imports reduced by 1.61 percent to $34.09 billion during July-April 2014-2015 from $34.65 billion of previous year.
Dar also announced medium term macroeconomic target of the present government from 2015 to 2018. The government set the GDP growth rate target at 5.5 percent for the year 2015-16, 6 percent for 2016-17 and 7 percent for the year 2017-18.
Furthermore, government has estimated to increase the foreign exchange reserves to $19 billion by the end of the outgoing 20115 and to $20 billion by 2017-18. The debt to GDP ratio would be brought down to 60 percent by 2017-18 from 63 percent of the ongoing year. Tax to GDP ratio has been estimated to increase by 13 percent from 11 percent.
The economic wizard of the PML-N government vowed to eliminate loadshedding by the end of December 2017, as government has initiated power projects which would start producing 10,600 megawatts electricity in next three years.