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Minister for Planning and Development Ahsan Iqbal and Adviser to the Prime Minister on Finance Miftah Ismail announced the economy's performance over fiscal year 2017-18 (FY17-18).
THE PML-N'S PERFORMANCE
"Energy, economy, elimination of extremism and education were the 'four Es' that we had discussed in our manifesto," Ahsan Iqbal said.
"We created two plans ─ one was an immediate plan, the other was our Vision 2025," he explained.
The PML-N government faced "major constraints and bottlenecks as a development framework was not present," he said.
Despite this, the government had, over the last five years, allocated Rs47 billion to higher education, built 1,750 kilometres in motorways, and added 11,000 MegaWatts to the power grid.
"We provided energy to industries so that the economy could grow. Record demand has been generated from [an increase in] energy in Pakistan."
"The China-Pakistan Economic Corridor is a reality today. Of a total investment of $46bn, $39bn is being used to build roads and infrastructure."
"We have used our own budget to curb terrorism, financing Operations Zarb-i-Azb and Raddul Fasaad," he said.
Miftah Ismail said the government couldn't "possibly have given a budget for just three months."
"What were we supposed to do? Raise salaries for three months, tell India to stop LoC firing for three months, and reduce taxes for three months? That is not how economics works. If we were to do this, it would have been a disservice to our country and we would not have been doing our jobs," he said.
"The day the next government comes, it it has the right to change whatever it wants in the budget. Also, Ahsan Iqbal has left a Rs100bn block for the next government to spend on development as they please. 95pc of the same expenditures are faced by every government. Each government has to pay salaries and so on," he said.
"You will see that all provinces will give their budget too, even though they are busy playing politics on the matter at the moment," Ismail added.
Iqbal said: "The provinces have to give a budget that is based on expenditures. They are given revenues which mostly come from the federal government. The federal government has to define the country's economic policy for the next year. Through this, the industrialist decides the cost of production. How can we leave them without a budget?"
GDP GROWTH RATE
The gross domestic product (GDP) grew at a rate of 5.8 per cent over the past year, Iqbal revealed, narrowly missing the PML-N's manifesto target of at least 6pc.
"We would have achieved 6.1pc without political turmoil," he explained. "This is compared to an average of 3pc GDP growth" before the PML-N came to power in 2013.
The momentum of growth remained above 5pc for the last two years running, reaching a 13-year high of 5.8pc in FY17-18 on the back of "strong performance in the agriculture, industrial and service sectors", Iqbal said.
Agriculture grew at a rate of 3.81pc, while industries and services grew 5.8pc and 6.43pc respectively, he announced.
The agri sector, saw the highest growth over the last 13 years, Iqbal said, explaining that the growth was achieved "on the back of initiatives such as expansion in credit to the sector, along with the Kissan Package, provision of better quality seeds including hybrid and high-yield varieties, and timely availability of agriculture inputs such as fertiliser, pesticides, etc."
He added: "We are investing in technology so that we are ready for the fourth industrial revolution."
Large Scale Manufacturing (LSM) registered growth of 6.13pc, the highest in 10 years, the PM's financial adviser Miftah Ismail revealed. Manufacturing grew by 6.24pc, the highest in 11 years, he said.
The services sector has seen stable growth of 6.43pc over the last two years, Ismail added.
INFLATION
Average inflation from July-March in FY17-18 was contained at 3.78pc, lower than the 4.01pc observed during the same time period last year, Ismail said.
The PML-N had vowed to restrict inflation to a single digit between 7-8pc.
"A moderate outlook of food prices amid abundant grain stocks and the recent increase in policy rate will help in containing the average inflation below target of 6pc during FY 2018," according to the PES.
"During the current fiscal year FY17-18, CPI increased to 4.6pc which was the highest since the start of current fiscal year. In January 2018 it was came down to 4.4pc and in March 2018, it fell to an eight-month low at 3.2pc on account of subdued food prices which offset the impact of rise of petroleum prices," the PES reads.
FISCAL POSITION
"Total revenues grew by 19.8pc to reach Rs 2.38 trillion (6.9pc of the GDP) during July-December, FY17-18 against Rs1.99tr (6.2pc of the GDP) in the same period last fiscal year, the PES said.
"The impressive performance both in tax and non-tax revenues is attributed to a significant rise in total revenues. During the first nine months of current fiscal year, the Federal Bureau of Revenue has been able to collect around Rs2.63tr against Rs 2.27tr during the same period of FY16-17, posting growth of 15.8pc," according to the survey.
"Total expenditure increased by 14pc during July-December, FY17-18 and stood at Rs3.18tr (9.2pc of GDP) against Rs2.79tr (8.7pc of GDP) in the same period of FY16-17. Within total expenditure, development spending (excluding net lending) increased sharply and recorded at 23.4pc to reach Rs613.8bn during July-December FY17-18 as compared to Rs497.4bn in the comparable period of FY16-17," the PES said.
"On the other hand, current expenditure grew by 13.5pc during July-December FY17-18 on account of a 12.4pc increase in federal and 15.8pc increase in provincial government current expenditures. In absolute terms, current expenditures increased from Rs2.24tr in the first six months of FY16-17 to Rs2.55tr during the same period of current fiscal year," according to the PES.
The fiscal deficit in the first six months of FY17-18 was restricted to 2.3pc of the GDP compared to 2.5pc during the corresponding period last year due to strong growth in revenues relative to expenditures, according to the PES 17-18.
Net debt has increased from 60.2pc to 61.4pc, Ismail said, while the external debt has decreased from 21.4pc of GDP to 20.5pc of the GDP.
"The external debt that we have taken has been used on development and to finish projects that previous governments had taken on and not finished," Ismail explained.
Total public debt stood at Rs 22.82tr by the end of December 2017, the PES said, while total debt of was Rs20.88tr. Total public debt recorded an increase of Rs1.4tr during the first six months of the current fiscal year, the PES said.
TRADE
"The current fiscal year has seen continued exports growth in all nine months," Iqbal said.
Exports increased by 12pc while imports have slowed down to 16.6pc as compared to 48pc at the start of current financial year, he added.
The PES said that exports from July-March in FY17-18 had reached $17.1bn, compared to $15.1bn in the corresponding period last year, registering 13.1pc growth.
Imports grew 15.7pc during the same period, rising from $38.37bn in FY16-17 to $44.38bn this year, registering an increase of $6.01bn in absolute terms, the PES said.
"To slow down imports, an additional regulatory duty was imposed to curtail the inflated imports," the document said.
The balance of payments remained stressed due to rising imports of capital equipment and fuel this fiscal year, while a recovery in global oil prices "also played a role in pushing up the import bill", the PES said.
The growth in export earnings and remittances was insufficient to overcome the current account deficit, it said.
Remittances registered significant growth of 3.6pc during in FY17-18 so far, against a decline of 2pc last year, reaching $14.6bn in the first nine months of the current fiscal year, compared to $14.4bn over the same period last year, according to the PES.
"The trend will continue in coming months and it is expected that the target of $20.6bn will be achieved," the PES said.
Forex reserves declined by $4.5bn this year.
"With the current account deficit widening and not being fully offset by financial inflows, the country’s total liquid forex reserves fell by $4.5bn during July-March FY17-18," the PES said.
"Pakistan’s current account deficit contracted by 9.2pc on a month-on-month basis in March 2018 and reached $1.16bn compared to $1.28bn in February 2018. However, the current account deficit widened by 50.5pc and reached $12.03bn (3.8pc of GDP) during July-March FY17-18," according to the PES.
"This was mainly due to 20.7pc widening in the trade deficit, amounting to $22.3bn. The widening of trade deficit is mainly due to a surge in the import bill by 16.6pc, reaching $40.6bn," the PES said.
INFRASTRUCTURE
The government's fixed investment has increased significantly in power generation and transmission, and gas distribution projects since FY13-14, the survey said, with 35 projects with total power generation capacity of 12,230MW added to the system.
Until Feb 2018, installed capacity of power generation had reached 29,573MW, compared to 22,812MW the year before, showing 30pc growth.
Although power generation varies due to availability of inputs and other constraints, generation increased from 96,496 gigawatts/hour in FY12-13 to 117,326GW/hour in FY16-17, the survey said, exhibiting 22pc growth.
From July-Feb FY17-18, power generation remained 69,956GW/hour.
https://www.dawn.com/news/1403805/g...ans-economy-grows-at-highest-rate-in-13-years
THE PML-N'S PERFORMANCE
"Energy, economy, elimination of extremism and education were the 'four Es' that we had discussed in our manifesto," Ahsan Iqbal said.
"We created two plans ─ one was an immediate plan, the other was our Vision 2025," he explained.
The PML-N government faced "major constraints and bottlenecks as a development framework was not present," he said.
Despite this, the government had, over the last five years, allocated Rs47 billion to higher education, built 1,750 kilometres in motorways, and added 11,000 MegaWatts to the power grid.
"We provided energy to industries so that the economy could grow. Record demand has been generated from [an increase in] energy in Pakistan."
"The China-Pakistan Economic Corridor is a reality today. Of a total investment of $46bn, $39bn is being used to build roads and infrastructure."
"We have used our own budget to curb terrorism, financing Operations Zarb-i-Azb and Raddul Fasaad," he said.
Miftah Ismail said the government couldn't "possibly have given a budget for just three months."
"What were we supposed to do? Raise salaries for three months, tell India to stop LoC firing for three months, and reduce taxes for three months? That is not how economics works. If we were to do this, it would have been a disservice to our country and we would not have been doing our jobs," he said.
"The day the next government comes, it it has the right to change whatever it wants in the budget. Also, Ahsan Iqbal has left a Rs100bn block for the next government to spend on development as they please. 95pc of the same expenditures are faced by every government. Each government has to pay salaries and so on," he said.
"You will see that all provinces will give their budget too, even though they are busy playing politics on the matter at the moment," Ismail added.
Iqbal said: "The provinces have to give a budget that is based on expenditures. They are given revenues which mostly come from the federal government. The federal government has to define the country's economic policy for the next year. Through this, the industrialist decides the cost of production. How can we leave them without a budget?"
GDP GROWTH RATE
The gross domestic product (GDP) grew at a rate of 5.8 per cent over the past year, Iqbal revealed, narrowly missing the PML-N's manifesto target of at least 6pc.
"We would have achieved 6.1pc without political turmoil," he explained. "This is compared to an average of 3pc GDP growth" before the PML-N came to power in 2013.
The momentum of growth remained above 5pc for the last two years running, reaching a 13-year high of 5.8pc in FY17-18 on the back of "strong performance in the agriculture, industrial and service sectors", Iqbal said.
Agriculture grew at a rate of 3.81pc, while industries and services grew 5.8pc and 6.43pc respectively, he announced.
The agri sector, saw the highest growth over the last 13 years, Iqbal said, explaining that the growth was achieved "on the back of initiatives such as expansion in credit to the sector, along with the Kissan Package, provision of better quality seeds including hybrid and high-yield varieties, and timely availability of agriculture inputs such as fertiliser, pesticides, etc."
He added: "We are investing in technology so that we are ready for the fourth industrial revolution."
Large Scale Manufacturing (LSM) registered growth of 6.13pc, the highest in 10 years, the PM's financial adviser Miftah Ismail revealed. Manufacturing grew by 6.24pc, the highest in 11 years, he said.
The services sector has seen stable growth of 6.43pc over the last two years, Ismail added.
INFLATION
Average inflation from July-March in FY17-18 was contained at 3.78pc, lower than the 4.01pc observed during the same time period last year, Ismail said.
The PML-N had vowed to restrict inflation to a single digit between 7-8pc.
"A moderate outlook of food prices amid abundant grain stocks and the recent increase in policy rate will help in containing the average inflation below target of 6pc during FY 2018," according to the PES.
"During the current fiscal year FY17-18, CPI increased to 4.6pc which was the highest since the start of current fiscal year. In January 2018 it was came down to 4.4pc and in March 2018, it fell to an eight-month low at 3.2pc on account of subdued food prices which offset the impact of rise of petroleum prices," the PES reads.
FISCAL POSITION
"Total revenues grew by 19.8pc to reach Rs 2.38 trillion (6.9pc of the GDP) during July-December, FY17-18 against Rs1.99tr (6.2pc of the GDP) in the same period last fiscal year, the PES said.
"The impressive performance both in tax and non-tax revenues is attributed to a significant rise in total revenues. During the first nine months of current fiscal year, the Federal Bureau of Revenue has been able to collect around Rs2.63tr against Rs 2.27tr during the same period of FY16-17, posting growth of 15.8pc," according to the survey.
"Total expenditure increased by 14pc during July-December, FY17-18 and stood at Rs3.18tr (9.2pc of GDP) against Rs2.79tr (8.7pc of GDP) in the same period of FY16-17. Within total expenditure, development spending (excluding net lending) increased sharply and recorded at 23.4pc to reach Rs613.8bn during July-December FY17-18 as compared to Rs497.4bn in the comparable period of FY16-17," the PES said.
"On the other hand, current expenditure grew by 13.5pc during July-December FY17-18 on account of a 12.4pc increase in federal and 15.8pc increase in provincial government current expenditures. In absolute terms, current expenditures increased from Rs2.24tr in the first six months of FY16-17 to Rs2.55tr during the same period of current fiscal year," according to the PES.
The fiscal deficit in the first six months of FY17-18 was restricted to 2.3pc of the GDP compared to 2.5pc during the corresponding period last year due to strong growth in revenues relative to expenditures, according to the PES 17-18.
Net debt has increased from 60.2pc to 61.4pc, Ismail said, while the external debt has decreased from 21.4pc of GDP to 20.5pc of the GDP.
"The external debt that we have taken has been used on development and to finish projects that previous governments had taken on and not finished," Ismail explained.
Total public debt stood at Rs 22.82tr by the end of December 2017, the PES said, while total debt of was Rs20.88tr. Total public debt recorded an increase of Rs1.4tr during the first six months of the current fiscal year, the PES said.
TRADE
"The current fiscal year has seen continued exports growth in all nine months," Iqbal said.
Exports increased by 12pc while imports have slowed down to 16.6pc as compared to 48pc at the start of current financial year, he added.
The PES said that exports from July-March in FY17-18 had reached $17.1bn, compared to $15.1bn in the corresponding period last year, registering 13.1pc growth.
Imports grew 15.7pc during the same period, rising from $38.37bn in FY16-17 to $44.38bn this year, registering an increase of $6.01bn in absolute terms, the PES said.
"To slow down imports, an additional regulatory duty was imposed to curtail the inflated imports," the document said.
The balance of payments remained stressed due to rising imports of capital equipment and fuel this fiscal year, while a recovery in global oil prices "also played a role in pushing up the import bill", the PES said.
The growth in export earnings and remittances was insufficient to overcome the current account deficit, it said.
Remittances registered significant growth of 3.6pc during in FY17-18 so far, against a decline of 2pc last year, reaching $14.6bn in the first nine months of the current fiscal year, compared to $14.4bn over the same period last year, according to the PES.
"The trend will continue in coming months and it is expected that the target of $20.6bn will be achieved," the PES said.
Forex reserves declined by $4.5bn this year.
"With the current account deficit widening and not being fully offset by financial inflows, the country’s total liquid forex reserves fell by $4.5bn during July-March FY17-18," the PES said.
"Pakistan’s current account deficit contracted by 9.2pc on a month-on-month basis in March 2018 and reached $1.16bn compared to $1.28bn in February 2018. However, the current account deficit widened by 50.5pc and reached $12.03bn (3.8pc of GDP) during July-March FY17-18," according to the PES.
"This was mainly due to 20.7pc widening in the trade deficit, amounting to $22.3bn. The widening of trade deficit is mainly due to a surge in the import bill by 16.6pc, reaching $40.6bn," the PES said.
INFRASTRUCTURE
The government's fixed investment has increased significantly in power generation and transmission, and gas distribution projects since FY13-14, the survey said, with 35 projects with total power generation capacity of 12,230MW added to the system.
Until Feb 2018, installed capacity of power generation had reached 29,573MW, compared to 22,812MW the year before, showing 30pc growth.
Although power generation varies due to availability of inputs and other constraints, generation increased from 96,496 gigawatts/hour in FY12-13 to 117,326GW/hour in FY16-17, the survey said, exhibiting 22pc growth.
From July-Feb FY17-18, power generation remained 69,956GW/hour.
https://www.dawn.com/news/1403805/g...ans-economy-grows-at-highest-rate-in-13-years
