Islamabad: Economic Survey — the report card of the government for the current financial year ending on June 30 — to be unveiled by Finance Minister Ishaq Dar on Thursday is likely to be a mixed bag of improved economic performance and missed targets.
But he is expected to concentrate more on success stories than missed targets, which will be blamed on floods, PTI chief Imran Khan’s sit-in, the ongoing operation against militants, fall in commodity prices and global slowdown.
The minister had set an economic growth target of 5.1 per cent in the current year’s budget. At a provisional growth rate of 4.2pc, the target has been missed by a wide margin, but is still better than previous year’s 4.03pc.
The GDP growth target was promised on the basis of 3.3pc growth target in agriculture, 6.8pc rise in the industrial sector output and 5.2pc improvement in the services sector. But all the three major sectors have fallen short of the target, leading to slower than anticipated GDP growth rate.
According to information gained from official sources, agriculture grew by 2.88pc, industry by 3.62pc and services by 4.95pc.
Important crops grew by a nominal 0.28pc — against the target being 1.2pc. But this should be seen in the context of last year’s bumper crops of wheat and sugarcane. Other crops also performed poorly, increasing 1.09pc against the target of 4.5pc.
But the cotton ginning sector posted an increase of 7.4pc on the back of last year’s negative growth and surpassed the 5pc growth target.
Major growth was shown in livestock, forestry and fishing sectors where data collection methods have always been under criticism over the issue of credibility. Livestock grew by 4.12pc, higher than the target of 3.8pc, while fishery and forestry posted 5.75pc and 3.15pc growth — the target being 2pc for both.
The performance of the industrial sector is also not encouraging when seen in the context of the 6.8pc target. It posted 3.62pc growth this year, lower than last year’s 4.45pc. Except construction and small-scale manufacturing, almost all the components of industry missed the target by a wide margin.
Mining and quarrying grew by just 3.84pc against a target of 6pc, while manufacturing growth rate increased by 3.17pc with the target being 4.5pc. Large-scale manufacturing grew by 2.38pc, falling short of the target of 4pc.
The services sector that has been a saving grace over the past few years failed to demonstrate its strength during the current year. It grew by 4.95pc, staying slightly behind 5.2pc target. Government services, finance and insurance, housing and other services met or surpassed the target while wholesale and retail trade, transportation and communication services fell behind the targets set for them.
The contribution of the commodity producing sectors to the overall economic growth also declined this year. The combined contribution of the sectors (agriculture and industrial) in the 4.24pc growth this year stood at 1.35pc, down from last year’s 1.65pc to the 4.02pc GDP growth.
In the first 10 months of the year, current account deficit decreased to $1.36 billion compared to $2.93bn of last year because of historic low oil prices and higher remittances. Another hallmark of the year was about $1.45bn inflows under coalition support fund from the US against last year’s $1.05bn.
And despite all efforts and announcements made by the government, the generation and distribution of power and gas grew by 1.94pc, much less than 5.57pc registered last year. The growth target of 5.5pc was missed by a wide margin.
The government has also missed the target for the investment-to-GDP ratio. Against a target of 15.7pc, the ratio stood at 15pc this year, below the 15.1pc achieved in FY2013-14. According to official papers, both domestic and foreign direct investment contributed to this downward movement.
National savings were expected to grow by 14.2pc of GDP and it surpassed the target by a slight margin to 14.5pc from 13.7pc in the year before.
The consolidated revenue during July-March 2014-15 stood at Rs2.683 trillion, compared to Rs2.477trn in the same period last year, posting an 8.3pc growth. This has been realised on the back of 12.8pc growth in FBR revenue, below than 23pc target.
The trade deficit deteriorated by $476 million with import growth outpaced the exports by a large margin. Exports stood at $20.2bn which was 3.2pc behind last year’s while imports were $528m less than the last year’s $34.6bn.
Workers’ remittances were a saving grace going up by 16pc to $15bn in the first 10 months of the year as against $12.9bn of last year.
