KARACHI: Pakistan’s economy to achieve 13-year high GDP growth this fiscal year after averaging at 3.0 percent in five years from 2008 to 2013, Advisor to Prime Minster on Finance, Miftah Ismail said on Thursday.
Pakistan has seen a visible economic turnaround over the last five years, due to successful implementation of a comprehensive program of economic revival aimed at higher economic growth and macro-economic stability.
The growth momentum remained above 5.0 percent for the last two years in a row and reached 5.79 percent in FY2018 which is 13-year high on account of a strong performance in agriculture, industry and services sectors which grew by 3.81 percent, 5.80 percent and 6.43 percent, respectively.
The highest growth in agriculture sector in last 13 years was achieved on the back of initiatives taken to improve the sector such as expansion in credit to agriculture sector along with agriculture Kissan Package, provision of better quality seeds including hybrid and high yield varieties and timely availability of agriculture inputs including fertilizer, pesticides etc.
Large Scale Manufacturing (LSM) also recorded a growth of 6.13 percent highest in ten years. Industrial sector growth improved by 5.80 percent, highest in ten years. Manufacturing grew by 6.24 percent highest in 11 years.
The performance of services sector witnessed a stable growth of 6.43 percent in last two years. Consumption is the largest component of aggregate demand followed by investment and net exports.
During FY 2018, households’ average propensity to consume remained fairly constant at around 85.5 percent at constant prices and around 82.0 percent in current prices.
Contained inflation helped increase in consumption by private and general government. During July-March FY 2018, current account deficit remained $12 billion and is expected that it will cross $15 billion at the end of current fiscal year.
The national savings and domestic savings as percentage of GDP remained almost at same level of last year. National income remained less than expenditures during FY 2018 when compared with FY 2017 which resulted increase in saving-investment gap.
The increase in saving-investment gap in turn resulted in higher current-account deficit. Gross Fixed Capital Formation (GFCF), considered as fixed investment stood at Rs5,099.1 billion in FY 2018 compared to Rs4,632.8 billion last year posting a growth of 10.1 percent. The private sector GFCF posted a growth 5.2 percent as it increased to Rs3,371.2 billion compared to Rs3,205.5 billion last year while the public sector GFCF increased to Rs373.3 billion compared to 339.5 billion last year showing a growth of 9.9 percent.
The expenditure on GFCF incurred by federal, provincial and district governments has increased by 23.9 percent, 22.1 percent and 45.7 percent, respectively. During FY 2018, per capita income increased by 0.5 percent over last year to $1641.