Key points from the Pakistan Economic Survey for FY2015-16
Major cited achievements of outgoing fiscal year includes: picking up economic growth, price stability, improvement in tax collection, reduction in fiscal deficit, worker remittances torch new height, and foreign exchange reserves remained high. However, most of these are exogenous and have little to do with the government’s own economic management or policies.
The external account is allegedly strong because of:
1. Loan inflows from the IMF and bonds floated in the international market
2. High worker remittances
3. Low international oil prices.
On the domestic front, the economy failed to post an improvement in exports, despite the announcement of the GSP plus status earlier and the Strategic Trade Policy Framework (STPF) this year. Despite the urgency to arrest declining exports, it took the federal government three years to come up with the STPF.
– Government claims that the GDP growth has accelerated to 4.71 Percent in 2015-16 against 4.04 percent in the last year. However, due to increased incidence of indirect taxes, this growth in increasingly becoming non-inclusive, and can possibly worsen income inequality.
– Agriculture sector recorded negative growth of -0.19 percent against growth of 2.53 percent last year. Important to note that the sector employs the highest proportion of the labor force, especially those at the bottom of the pyramid. The dismal performance in the agriculture sector, while there was an acceleration in the other industrial sectors, also indicates the regressive impact of the federal government’s economic policies.
– The manufacturing growth registers 5.00 percent as compared to 4.81 percent last year. Small scale manufacturing witnessed growth at 8.21 percent against growth of 8.22 percent last year. LSM registers improved growth of 4.61 percent as compared to 3.29 percent last year
– Electricity generation and distribution and gas distribution register growth at 12.18 percent
– Services sector witnesses growth of 5.71 percent as compared to 4.31 percent last year
– Per capita income in dollar terms has reached to 1560.7, registering a growth of 2.9 percent.
– Total investment recorded a growth of 5.78 percent in 12016. During July April FY 2016 net foreign direct investment crossed US$ 1 billion with growth of 5.4 percent
– Cotton production stood at 10.074 millions of bales. Wheat production increased to 25,482 thousand tonnes in FY 2016. Rice production has decreased to 6,811 thousand tonnes. Sugarcane production increased to 65,475 thousand tonnes. Maize production decreased to 4,920 thousand tonnes. Again, the federal government has failed to arrest the supply side issues in the agriculture sector, which will impact the livelihoods of farmers.
– In automobile sector such as buses, LCVs, trucks and jeeps and cars register growth of 81.95 percent, 68.53 percent, 41.68 percent and 29.73 percent respectively.
– Mining and Quarrying sector grew by 6.8 percent in FY2016
– Total expenditure of Rs.5,962.9 billion was estimated for the current fiscal year
– Total revenues stood at Rs.2,961.9 billion in July-March FY 2016
– FBR tax collection increased to RS.2,346.1 billion during July-April FY 2016
– During current fiscal year, SBP decreased the policy rate to low level of 5.75 percent
– Government sector borrowing (net) reached at Rs.567.5 billion during July-06th May FY 2016. Because of the inflated domestic debt stock, the key beneficiary of historically low interest rates remains the government itself.
– During the period July 2015-11th May 2016, Pakistan Stock Exchange bench mark-100 Index increased by 1,867 points and closed at 36,266.23 points level on 11th May, 2016
– Inflation rate measured by the changes in CPI, averaged at 2.8 percent during July-April, FY2016 against 4.8 percent in the comparable period last year
– During July-March FY 2016, exports reached to US$15.6 billion dollars
– Public debt recorded at Rs.19.168 billion as at end March 2016
– Literary rate of population is 60 percent as compared to 58 last year