According to news reports, a new rating of the World Bank has projected the growth of Pakistan’s economy at 5 percent for the fiscal year 2016-17. The government had set a promising target of 5.4 percent for the year which the bank believes is unlikely to be achieved. In its report on ‘Pakistan Development Update – Making growth matter’, the international lending agency hopes the recovery of agriculture sector, foreign investment in infrastructure development and booming services sector will raise the rate of growth to 5.4 percent during 2017-18. The services sector constitutes more than half of the country’s economy and is regarded as the primary source of growth, pushing Pakistan into the list of emerging economies in the world. It is hoped that the agriculture sector will grow at the rate of 2.7 percent and industrial sector by 5.7 percent during 2016-17. The growth is likely to be driven by public and private consumption due to moderate increase in investment which will further increase to 14.4 percent during the current fiscal year and 14.6 percent in the financial year 2018.
According to the bank, the low investment-to-GDP ratio will be increased due to infrastructure projects under China-Pakistan Economic Corridor and the local investment. The corridor project is expected to spur growth in the construction industry and will increase power generation. The country has been facing energy crisis for the last many years and improvement in the electricity supply will push growth activities in industrial and services sectors. The international donor agencies are begging, beseeching and forcing Islamabad to start structural reforms to stimulate business and industrial activities. But the government is beating about the bush for one reason or the other delaying the reform process. The pathetic part of the situation is that the government is disparity seeking to enhance its revenues and imposing unrealistic taxes on all and sundry in the country. Instead of boosting business and investment, the government steps have come as stumbling block in the growth of the economy. One fails to understand who bars the government from facilitating the foreign or local investors and why it introduces such policies which bring mismanagement and shortfall of revenue. The short term steps always bring long term problems. The government only concentrates on the revenue generation but ignores long term losses.
According to the report, the consumer confidence is declining and exports are falling in the country. The low exports have widened the current account deficit to 1.7 percent ofthe gross domestic product and is requiring the government to give serious attention to it.The countries in the region are achieving over 7 percent growth and keeping in view the failures of the government, 5 percent growth in itself is an achievement
