Government releases Pakistan Economic Survey, highlighting financial performance and challenges

Newly-built residential apartments stand in the Pakistani capital Islamabad on April 27, 2018. Pakistan is set to record its fastest economic growth since 2005 during the current fiscal year, authorities said. (AFP)

• Pakistan achieved growth rate of 5.79%, the highest in 13 years.
• The country incurred costs of $126.79 billion during the past 17 years due to terrorism.

KARACHI: Pakistan’s Gross Domestic Product (GDP) hit a 13-year-high growth rate of 5.79 percent in the current fiscal year, against the projected 6 percent, the country’s top economic managers announced in Islamabad on Thursday.
The Minister for Planning and Development, Ahsan Iqbal, and the Adviser to the Prime Minister on Finance, Miftah Ismail, credited the performance of the agriculture, manufacturing and services sectors for the achievement.
Presenting the Pakistan Economic Survey 2017-18, an annual report on the performance of the country’s economy, Iqbal said the government narrowly missed its growth target due to the political turmoil in the country, which negatively affected economic progress.
The ruling Pakistan Muslim League-Nawaz party “focused on its four-point agenda, including energy, economy, elimination of terrorism and education by making two plans,” he said, adding: “The government, in the absence of any development framework, faced major constraints.”
Highlighting the government’s achievements during its tenure, Iqbal said it allocated Rs 47 billion ($406 million) to higher education, added 11,000 megawatts to the national grid, and built 1,750 kilometers of roads.
“Ninety-five percent of the budgetary expenditures will remain the same for the next government,” Ismail said, adding: “The in-coming government can modify the budget according to its own strategies.” A general election is scheduled for July 15, 2018.
According to the survey, GDP grew by more than 5 percent in each of the past 2 years, and by 4 percent in each of the three preceding years.
“This achievement is remarkable as it has been accomplished in the face of global headwinds,” according to the report. “The strong economic growth has been underpinned by supportive macroeconomic supply-and-demand policies.”
It added: “In fiscal year (FY) 2018, the agriculture, industry and service sectors grew by 3.81 percent, 5.80 percent and 6.43 percent, respectively.”
The growth was achieved in a country that incurred Rs 10.76 trillion in direct or indirect costs over the past 17 years due to terrorism.
Pakistan also continues to face a balance of payments challenge due to an increasing current-account deficit that reached $12 billion during July-March FY 2018, and is expected to top $15 billion by the end of current fiscal year.
The survey reveals that the country’s total revenue grew by 19.8 percent to Rs 2.4 trillion, or 6.9 percent of GDP, during July-December, FY2018.
The consumer price index, a measure of the change in the cost of household goods and services, rose by 4.6 percent, the highest increase since the start of the current fiscal year. In January 2018, the increase fell to 4.4 percent and in March it dropped to 8-month low of 3.2 percent on account of subdued food prices, according to the report.
Government borrowing from external sources to finance the fiscal deficit was Rs 384 billion. The increase in external debt reflected both borrowings for financing the deficit as well as a revaluation of losses due to the depreciation of Pak Rupee against the US Dollar, as well as the appreciation of other currencies against US Dollar.
The survey also noted that Pakistan was harnessing its geostrategic location into a geo-economic advantage through the China Pakistan Economic Corridor.
However, the document pointed out that some risks and challenges remained on the domestic and external fronts, particularly the unfavorable balance-of-payments position.