Monday, June 2, 2014

Achhe din has come to...Pakistan

The economy is steadily improving, almost reaching the high points under Musharraf. The projected growth rates of 7% in 2017 may be a bit too ambitious, unless there is an economic breakthrough with India. Also promised are 900,000 jobs in next four years, which will again require economic co-operation with India.

In turn India will also significantly benefit from economic ties with Pakistan.

It all points to a fast time-table for resolution of the Kashmir problem. While all other interests will have a look in, the efforts can only succeed if common Kashmiris agree to a final settlement. The politicians have always claimed that they were very close to a solution before Kargil created a brake or Mumbai put a stop to talks. Such events may happen in the future as well and it will be always best to remain prepared.
Launching the survey at a press conference, he said this is less than the targeted 4.14 per cent but it is for the first time in six years that the country has entered the territory of four per cent growth this year.

And, the GDP growth rate would be increased one per cent each during the next three years taking it to 7 per cent in 2017. Similarly, the industrial growth has been recorded at 5.84 per cent as against 1.37 per cent last year.

The minister also said that the large-scale manufacturing recorded growth of 5.135 per cent as against 4.08 per cent last year. He said electricity generation and gas distribution growth last year was minus 16.33 per cent and this year it has grown by 3.72 per cent.
Construction recorded growth of 11.31 per cent this year as against minus 1.685 per cent last year while wholesale and retail trade increased by 5.181 per cent as against 3.38 per cent last year, he said.

Ishaq Dar said that transport and communication recorded growth of 2.89 per cent as against 2.88 per cent last year while agriculture sector showed growth of 2.12pc against 2.88pc last year.
Major crops showed growth of 3.74 per cent as compared to 1.19pc last year. Wheat production this year is 25.29 million tonnes as compared 24.21 million tonnes last year, he said.
Rice production this year stood at 6.8 million tonnes as against 5.54 million tonnes; sugarcane 66.47 million tonnes as compared to 63.75 million tonnes last year and maize production this year is 4.531 million ronnes as against 4.22 million tonnes last year.
Provisional estimates of cotton production this year are 12.77 million bales as against 13.03 million bales last year. Similarly, grams and oil seeds recorded growth of minus 3.52 per cent.
The minister said inflation in the first eleven months of the current financial year was 8.6 per cent as against 7.5pc last year.

Exports in ten months of the outgoing financial year stood at $21 billion as against $20.1 billion last year, showing an increase of 900 million dollars.

Ishaq Dar said the grant of GSP Plus concession by the European Union has started impacting our textile sector positively as it grew by 7 per cent in value terms.

According to the survey, imports in ten months of the outgoing financial year stood at $37.1 billion as against $36.7 billion last year, indicating 1.2 per cent increase. The minister said there was a significant increase in import of plant and machinery which was a positive indication.

Workers' remittances in ten months of current financial year reached $12.9 billion as against $11.6 billion last year, showing a growth of 11.5pc. Foreign investment this year stood at $2.979 billion against $1.277 billion last year.

Foreign exchange reserves presently stood at $13.63 billion against $11.4 billion dollar last year, said the minister.

The survey further unveiled that per capita income this year has increased to $1,386 from $1,339 last year. Stock market crossed 29,700 points and its capitalisation increased by about 38 per cent. Tax revenue as percentage of GDP this year is 7pc as against 6.8pc last year.

Non-tax revenue as percentage of GDP remains at 2.7pc while total expenditure as percentage of GDP reduced to 12.9pc from 14.8pc last year.

Development expenditure this year as percentage of GDP was 2.2 per cent as against 2pc last year. Fiscal deficit in first ten months was 3.2 per cent as compared to 4.7pc last year.

The finance minister further said that FBR tax collections in 11 months have grown by 16.4 per cent. Ishaq Dar said the State Bank of Pakistan’s borrowing last year was Rs 416.8 billion, but this year the government paid back Rs 10.5 billion to the bank.

Hinting an increase in the defence budget, he said the PML-N government has made the defence of the country invincible.

To a question, he said major incentives will be given to the private sector to restore the confidence of the investors.

It is estimated that around 900,000 jobs will be created in the next four years after the introduction of G-3 and G-4 spectrum, said the finance minister.



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