See More on Facebook

Economics

Pakistan not hitting economic growth targets.

Agricultural, industrial growth registers sharp slowdown in Pakistan.


Written by

Updated: June 11, 2019

The economy grew at an average rate of 3.29 per cent (provisional) in fiscal year 2018-19 against an ambitious target of 6.2pc set in last year’s budget, the Pakistan Economic Survey revealed on Monday.

Sector-wise growth rates:

  • Agriculture: 0.85 per cent (against target of 3.8pc)
  • Industry: 1.4pc (against target of 7.6pc)
  • Services 4.7pc (against target of 6.5pc)

Revenue collection

Total revenue at Rs3,583.7bn (9.3pc of GDP) showed almost 0pc growth from July-March 2019, while growth in total expenditures was 8.7pc. The fiscal deficit was recorded at 5pc of the GDP compared to 4.3pc in the corresponding period last fiscal.

“Decelerated performance of total revenues primarily was due to marginal growth of 1.8pc in tax revenues and negative growth of 16.7pc in non-tax revenues,” the PES explained.

The Federal Board of Revenue’s tax receipts from July-April 2019 remained at Rs2,976bn against Rs2,922.5bn in the corresponding period last year, registered growth of 1.8pc.

“Actual tax collection during [the] first 10 months of the CFY remained at 67.7pc of revised target of Rs 4,398bn,” the document said.

Provincial revenue collection rose by 1.5pc from July-March 2019.

Expenditures

The government’s total expenditure increased by 8.7pc from July-March 2019 to Rs5,506.2bn (14.3pc of GDP) against last year’s spending of Rs5,063.3bn (14.6pc of GDP).

Current expenditure posted growth of 17.7pc to Rs4,798.4bn (12.4pc of GDP).

The federal and provincial governments’ current expenditures grew by 19.9pc and 13.7pc respectively during the period under review.

Development expenditure decreased to Rs655.9bn this fiscal compared to last year’s expenditure of Rs993.3bn, exhibiting 34pc negative growth compared to 23.6pc positive growth recorded last year.

The Public Sector Development Programme (PSDP) share in total development expenditure stood at 88pc or Rs578.5bn in the first nine months of the fiscal year. The same period last year saw Rs931.4bn expenditure.

This year’s PSDP expenditure saw a 37.9pc decline, while last year witnessed 24.7pc growth in PSDP spending.

The federal and provincial PSDP decreased by 14.5pc and 52.2pc respectively during July-March 2019 compared to the same period last year.

Deficits

According to the PES, exports fell by 1.9pc despite exchange rate depreciation, while imports declined by 4.9pc.

“This helped in reducing the trade deficit by 7.3pc during July-April FY18-19, while it had shown an expansion of 24.3pc during the corresponding period last year,” the document stated.

The current account deficit contracted by 27pc from July-April 2019, while it had expanded by 70pc in the corresponding period last fiscal year.

“Workers’ remittances played a major role in containing the current account deficit to 4.03pc of GDP,” the report said.

Inflation

The Consumer Price Index witnessed a rising trend in fiscal year 2018-19. It increased to 5.8pc in July 2018 after remaining sticky at 5pc for two months, and rose to 6.8pc in October 2018 “due to an increase in gas prices”, the PES noted.

From July-April 2019, headline inflation measured by the CPI averaged 7pc against the 3.77pc measured in the corresponding period last year “on the back of the prevalence of some underlying demand in the economy, as well as continued pass through of exchange rate depreciation and higher fuel prices.

Core inflation (non-food and non-energy) was recorded at 8.1pc compared to 5.6pc in the same period last year.

“The rising input costs on the back of high utility prices and the lagged impact of exchange rate depreciation is likely to maintain upward pressure on inflation during the remaining period of current fiscal year. The impact will be more visible on non food prices while the food prices are likely to remain stable due to effective monitoring of prices and smooth supply of essential commodities by the federal and provincial governments,” the PES said.

FDI and remittances

Remittances saw an 8.45pc increase in July-April 2019 compared to 5.36pc last year, reaching $17.88bn in the first 10 months of the fiscal year against $16.48bn last year.

“On the back of initiatives taken by the government and the trend observed, it is expected that the target of $21.2bn for FY2019 is likely to be achieved,” the report said.

Foreign investment dropped by 51.7pc in July-April 2019 to $1.377bn compared to $2.85bn in the same period last year.

Foreign direct investment from China comprised 31.2pc of overall inflows compared to 60.5pc in the preceding year.

“However, China continued to dominate direct investment, followed by UK and Hong Kong. A considerable decline in investment from Malaysia has been observed in this period,” the PES noted.



Enjoyed this story? Share it.


Dawn
About the Author: Dawn is Pakistan's oldest and most widely read English-language newspaper.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

G20 draft calls for digital economy rules within the year

Digital laws have been proposed before in the past but is gaining traction ahead of the G20s. The leaders’ declaration for this week’s Group of 20 summit will call for creating a framework for drawing up international rules on the digital economy to be called the “Osaka track,” according to a draft obtained by The Yomiuri Shimbun. It will also call for achieving results within the year. The G20 leaders are scheduled to gather in Osaka on Friday and Saturday. In the draft, the section on the digital economy is part of a separate “Osaka statement.” The Osaka statement draft welcomes progress in discussions among about 80 interested World Trade Organization member states on an e-commerce accord. The draft expresses the G20’s support for rule creation and other developments in this area through the Osaka track. It states that the leaders vow to collaborate so people all over the world w


By The Japan News
June 27, 2019

Economics

Korea, Saudi seek closer cooperation

The two sign MOUs, deals worth over $8 billion. President Moon Jae-in and Crown Prince Mohammed bin Salman of Saudi Arabia met in Seoul on Wednesday to discuss ways to strengthen cooperation in a wide range of areas. The crown prince arrived in Seoul earlier in the day and was met by Prime Minister Lee Nak-yon before moving on to Cheong Wa Dae for a welcoming ceremony followed by a meeting with Moon and his top aides. At the meeting, Moon stressed the importance of Korea-Saudi relations, highlighting economic projects between the two countries and Seoul’s involvement in Saudi’s Vision 2030 program. The Vision 2030 program is aimed at reducing the country’s economic dependence on oil and developing its public service sectors. “Korea is a strategic partner in Vision 2030, and the two countries are expanding the horizon of cooperation beyond construction and energy to ICT, smart infr


By The Korea Herald
June 27, 2019

Economics

Iran says US ‘lying’ on talks

Tehran vows to reduce commitments to 2015 nuclear deal with world powers. The United States enacted a new round of sanctions on Monday, targeting Iran’s supreme leader and some senior officials, further escalating tensions between the two sides. US President Donald Trump signed an executive order on Monday, saying he is “imposing hard-hitting sanctions on the supreme leader of Iran and the office of the supreme leader of Iran and many others”. Trump accused Iran’s Supreme Leader Ayatollah Ali Khamenei of being ultimately “responsible for the hostile conduct” of the country. In response, Iranian President Hassan Rouhani said on Tuesday that the fresh sanctions prove that Washington is lying about seeking to hold talks with Teheran. “At the same time as you call for negotiations you seek to sanction the foreign minister? It’s o


By China Daily
June 27, 2019

Economics

Vietnam, EU to sign free trade agreement

The agreement will be signed in Hanoi on June 30. The European Council announced on Tuesday that it has approved the European Union – Vietnam Free Trade Agreement (EVFTA) and the EU – Vietnam Investment Protection Agreement (EVIPA), and assigned the EU to sign the deals with Vietnam on June 30 in Hanoi The EVFTA and EVIPA are the most ambitious agreements concluded between the EU and a developing country. Once the EVFTA takes effect, over 99 per cent of tariff on goods from both sides will be lifted. Vietnam will remove 65 per cent of import tariff on goods from the EU. Remaining tariffs will be removed in the next decade. Besides offering significant economic opportunities, the trade agreement ensures that trade, investment and sustainable development go hand in hand, by setting the highest standards of labour, safety, environmental and consumer protection. Meanwhile, the EVITA will h


By Viet Nam News
June 26, 2019

Economics

US, China must compromise to reach deal: Chinese official

Both sides must come together in good faith for any progress to be made. Both China and the United States must be willing to compromise if they are to reach a deal when presidents Xi Jinping and Donald Trump meet at the G-20 Summit this week, a Chinese trade official has said. Vice-Minister for Commerce Wang Shouwen said at a news briefing yesterday that trade teams from both sides are in talks. He did not elaborate, but stressed that China negotiates on the basis of mutual respect, equality and mutual benefit. “An agreement reached has to be beneficial for both sides, and meeting each other halfway means both sides must be willing to compromise – not just one side giving way,” said Mr Wang, who is part of China’s negotiating team.


By The Straits Times
June 26, 2019

Economics

Pakistan to get $3bn in deposits, direct investments from Qatar

Pakistan has recently received loans from the World Bank and investments from the Saudis. Qatar is making $3 billion dollars worth of new investments in Pakistan, in the form of deposits and direct investments, said Special Assistant to Prime Minister on Information and Broadcasting Dr Firdous Ashiq Awan on Monday. The economic partnership between Qatar and Pakistan will reach $9 billion, Qatar News Agency quoted foreign minister Sheikh Mohammed bin Abdulrahman Al Thani as saying. “The Qatari-Pakistani economic partnership will amount to $9 billion. Qatar affirms


By Dawn
June 25, 2019