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

Ho Chi Minh attracts nearly 4 billion USD in investment in 2019

Manufacturing and textiles among key sectors. HCM City attracted about US$3.63 billion of foreign direct investment (FDI) capital in the first seven months of this year, marking a year-on-year increase of 15.2 per cent, according to the municipal People’s Committee. Nearly $688.8 million came from 678 newly registered projects, up 26.9 per cent in value and 18.3 per cent in the number of projects from the same period last year. In the period, 2,668 foreign investors bought shares and acquired stakes of domestic enterprises with total registered capital of $2.6 billion, 28.3 per cent and 16.7 per cent higher respectively than in the same period last year. Meanwhile, HCM City granted business licences to 24,529 new domestic enterprises worth more than VND396 trillion ($17 billion), up 0.9 per cent and 25.7 per cent, respectively. Up to 71,874 existing enterprises were allowed to add a c


By Viet Nam News
August 20, 2019

Economics

Taiwan raises 2019 GDP growth forecast

GDP growth raised on investment data. Taiwan has raised its forecast for gross domestic product (GDP) growth for 2019, reflecting increased investment in Taiwan by local suppliers looking to steer clear of the trade dispute between the United States and China. The Directorate General of Budget, Accounting and Statistics (DGBAS) said in a statement Friday that it has revised its estimate for GDP growth in 2019 to 2.46 percent, up 0.27 percentage points from its previous forecast in May. A big factor in the revision was increased investment at home by Taiwan-based companies operating in China that wanted to increase their production capacity in Taiwan to avoid punitive tariffs imposed by the United States on goods made in China, the DGBAS said. The trade dispute has also prompted a shakeup in the global electronics supply chain, leading to more production capacity in Taiwan, the DGBAS said.


By ANN Members
August 19, 2019

Economics

Signs of global recession haunt S. Korean economy

Trade wars and economic disputes have harmed the economy. A shadow of global recession looms over key economies as major markets have been dealing with some of their worst days in recent weeks. This is sparking concerns that chances of recession may also be growing on home turf, in South Korea. Last week, the yields on US 10-year Treasurys fell below two-year yields for the first time since 2007 – a phenomenon known as an inverted yield curve. Investors and experts alike are regarding such trend with wariness — every recession in the last 60 years has been preceded by the yield curve inversions. “Every time the US 10-year Treasuries fell below two-year yields, an economic recession came within a time frame of 18 months, which is why we have to be concerned,” Kong Dong-rak, an analyst at Daishin Securities said. “Even if it does not result in a recession, it is definitely a strong si


By The Korea Herald
August 19, 2019

Economics

Hong Kong adds another dimension to US-China trade war

Hong Kong’s has become another consideration for Xi and Trump in their ongoing trade dispute. The United States and China have been embroiled in a trade war for almost two years with reciprocal tariffs and fiery rhetoric coming from both sides. Both economies have suffered and the world’s two largest economies both face the looming threat of recession. China, in addition to a tenuous economic situation is also facing more woes in Hong Kong, a Chinese territory that is self-governed. Protesters have taken to the streets in the island-territory after a proposed extradition law was publicly opposed. The protests have evolved beyond the initial grievances to long-held anxieties over the economy, living space and, ultimately, rule by Beijing. As the pro-democracy protests gather steam and threaten to become more widespread and violent, the United States has involved itself and ad


By Cod Satrusayang
August 16, 2019

Economics

Moon urges Japan to choose ‘path of dialogue and cooperation’

Japan and South Korea have been locked in an increasingly ugly trade spat. President Moon Jae-in said Thursday that Seoul will cooperate with Tokyo if it retracts its recent trade restrictions, stressing the importance of international cooperation and free trade. “Within the realm of the international division of labor, if any country weaponizes a sector where it has a comparative advantage, the peaceful free trade order will inevitably suffer damages,” Moon said in his Liberation Day speech. “Better late than never. If Japan chooses the path of dialogue and cooperation, we will gladly join hands. We will strive with Japan to create an East


By The Korea Herald
August 16, 2019

Economics

Here’s how you can protect yourself from dengue

With the possibility of an outbreak, it’s important to understand the disease and recognise its symptoms. The WHO on Monday warned that the Kathmandu Valley might be in for a possible dengue outbreak. According to news published in the Post, in the fiscal year 2018-2019, more than 3,425 people had been infected with the dengue virus—the highest number of infections in 15 years. The mosquito-borne viral disease is transmitted by the female Aedes aegypti and Aedes albopictus mosquitoes. The same mosquitoes also transmit the chikungunya virus, yellow fever, and Zika virus, according to the WHO. With the lurking threat of the possibility of the disease’s outbreak in


By The Kathmandu Post
August 16, 2019