PRSP-II document shows $4.9 billion decrease from 2007-08
The Ministry of Finance has projected nominal Gross Domestic Product (GDP) at $162.6 billion in 2008-09, as compared to $167.5 billion in last fiscal year (2007-08), reflecting a decrease in size of GDP by $4.9 billion. This has been specified in the revised Macroeconomic Framework for the current fiscal year and proposed macroeconomic targets for the next fiscal year incorporated in PRSP-II document, released by the Ministry of Finance here on Friday.
According to the document, the overall vision of PRSP-II is to steer Pakistan’s economic growth back in the range of 5-7 percent per annum by stimulating growth prospects in the production sector; creating adequate employment opportunities; improving income distribution; and harnessing the country’s economic competitiveness through economic liberalisation, deregulation and transparent privatisation.
It has been projected that nominal GDP would grow to $171 billion in the next fiscal year (2009-10) as compared with GDP estimates of $162.6 billion in current fiscal year, projecting an increase of $8.4 billion.
According to the data, the exchange rate, that had been at Rs 62.5 a dollar in the last fiscal year (2007-08) is estimated to remain at Rs 79.8 a dollar in current fiscal year and Rs 83.6 a dollar in 2009-10, Rs 95.9 a dollar in 2012-13. The per capita income that had increased to $1,041 in the last fiscal year, would come down to $993 in the current fiscal year and again increase to $1,027 in the next fiscal year (2009-10).
The Data further showed that agriculture growth has been estimated at 3.3 percent in this fiscal year as against the growth of 1.5 percent in last fiscal year, and projected growth of agriculture is 3.5 percent in next fiscal year. The manufacturing sector that had posted a growth of 5.4 percent in last fiscal year is projected to witness a negative growth of 2.9 percent in the current fiscal year and projected to rebound to 2.5 percent in the next fiscal year.
Data further shows that services sector has remained main contributor in GDP growth of the country during last few years is projected to post a growth of 4.1 percent in the current fiscal year as against growth of 8.2 percent in the last fiscal year. It has been projected that services sector would register a growth of 4.6 percent in next fiscal year 2009-10.
The inflation, based on Consumer Price Index (CPI), is estimated to stay around 20 percent in the current fiscal year as compared with 12 percent in the last fiscal year and is projected to come down to 6 percent in next fiscal year 2009-10.
The Investment as compared with GDP is estimated at 19.5 percent for the current fiscal year as against 21.6 percent in the last fiscal year and it has been projected at 20.3 percent in next fiscal year. However, National Savings has been estimated at 13.6 percent in current fiscal year compared with 13.2 percent in last fiscal year. However, it has been projected that national savings would increase to 16 percent in the next fiscal year 2009-10.
The data on Pakistan’s Consolidated Fiscal Framework showed that total revenue has been estimated at Rs 1.973 trillion in current fiscal year as compared with Rs 1.5 trillion in last fiscal year and it has been projected that total revenues would be Rs 2.271 trillion in next fiscal year. Total expenditures are estimated at 2.535 trillion in the current fiscal year as compared with Rs 2.279 trillion in last fiscal year and Rs 2.746 trillion in next fiscal year 2009-10. Overall balance that had been negative Rs 780 billion in 2007-08 is estimated at negative Rs 562 billion in current fiscal year and negative Rs 475 billion in next fiscal year.
The most crucial part of the Poverty Reduction Strategy is to regain macroeconomic stability and establish an enabling environment for investment. The risk to macroeconomic stability emanates from the security situation and from the turmoil in the world economy. The structural reforms to be implemented in Pakistan during the next five years should make higher domestic savings and investment a permanent feature.
To ensure that macroeconomic problems do not impede the pace of job creation and poverty reduction efforts, the government would continue to review fiscal, monetary and exchange rate policies to harmonise them with stabilisation goal.
The country’s growth prospects would be further enhanced by a more externally-driven growth process, and by an acceleration of structural reforms to further improve productivity and investment climate. In this light, the PRSP-II will also endeavour to make growth more inclusive with a human face, which is essential for improving the life of the common man, the document said.