Pakistan likely to miss revised GDP growth target of 6pc
* Initial estimates suggest GDP growth at 5.5pc
* Growth in agriculture at 1.7pc against target of 4.8pc
* Large-scale manufacturing in industrial sector at 4.8pc against 12.5pc
ISLAMABAD: Pakistan is likely to miss the downwards-revised growth target of gross domestic product (GDP), with estimates suggesting that the GDP growth will remain less than 6 percent in the current fiscal year 2007-08, official sources told Daily Times on Monday.
The National Accounts Committee, which met to finalise the growth estimates for the current fiscal year, was informed about the performance of various economic sectors, said an official privy to the meeting.
After a detailed review of the performance of the each economic sector during the period from July to March, the committee estimated the GDP growth at 5.5 percent.
However, the meeting decided that the latest performance figures of services sector provided by the State Bank of Pakistan would be also be included in the review.
Keeping in view the central bank’s request, GDP estimates for the current fiscal year would be finalised on Tuesday (today), which are expected to be around 5.7-5.9 percent, the official added. Actual GDP growth target for the current fiscal year was 7.2 percent, which was lowered to 6 percent because of the poor performance of agricultural and industrial sectors.
Agricultural growth: The agricultural sector has registered an overall growth of 1.7 percent against the target set at 4.8 percent. Major crops registered a negative growth of 1.7 percent, while minor crops made a negative growth of 2.4 percent in the outgoing fiscal year.
Industrial growth: Industrial production also showed less than the projected growth. Large-scale manufacturing (LSM) grew at a meagre rate of 4.8 percent against the annual growth target of 12.5 percent. Foreign direct investment also witnessed a negative trend of over 30 percent during the current fiscal year, the official said.
Commodity producing sectors were also not able to maintain their growth momentum and recorded a 3.7 percent growth rate against the annual target of 7.4 percent.
However, the services sector again projected a growth of 7.4 percent against the target of 7.1 percent — mainly because of the good performance of the banking, insurance and telecommunication services sectors, the official added.
The official said that growth in services sector suited to mature economies, but not the emerging economies like Pakistan. Although the growth in services sector during the last few years helped the government to show handsome growth, it also resulted in increasing demands and high inflation because of negative trend in commodity sectors, he added.
The official said that an emerging economy like Pakistan could only sustain itself through continuous growth in the agricultural and manufacturing sectors, which ensure food security and help the country enhance its exports for foreign exchange earnings.
He believed that the government would not be able to project a higher GDP growth target for the next fiscal year 2008-09 because of low GDP growth this year.
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