April 3, 2003	Thursday	Muharram 30, 1424

ISLAMABAD, April 2: The imposition of war risk surcharge by the shipping lines and anticipated reduction in imports are making the task of the economic planners difficult to achieve the 4.5 per cent GDP growth target for 2002-03.

Official sources told Dawn on Wednesday the Economic Coordination Committee of the Cabinet (ECC) would be meeting on April 7 to gauge the impact of Iraq war on the economy. A number of decisions were expected to be taken by the ECC to remove the negative effects of the war in the region.

They said currently the manufacturing sector growth was up by 35 per cent mainly due to increased production of automobiles and Pak Arab Refinery Company.

However, the sources said the manufacturing sector could face adverse effects in case the Iraq war continued beyond April 15. This may force the government to revise downward its 4.5 per cent GDP growth target.

The shipping companies have imposed additional $150 war risk surcharge per 20 feet container due to which exporters are disturbed and reportedly seek the government’s help.

The sources said the achievement of export target of $10.4 billion could become difficult due to the US attack on Iraq.

Vakil Ahmad Khan, member income tax and the spokesman of the Central Board of Revenue, when contacted told Dawn that there might not be very serious effects of war on the economy during the current financial year. “But if this war continues for some time, things will be difficult to manage in 2003-04,” he said.

He said exports of May and June will be affected in case the war did not end. Generally, he said Letters of Credit (LCs) were opened two months before any export shipment. “We do not anticipate much negative effects on exports planned for March and April 2003, but for May and June our exports will become costlier, eroding our competitive edge,” Mr Khan said.