ISLAMABAD, April 21: Higher-than-expected wheat and rice produce owing to 29 per cent increased water availability and extraordinary industrial production has improved GDP growth forecast from 5.3 per cent to 5.8 for the current fiscal year.
A nine-month review of the economy released by government on Wednesday, however, conceded for the first time that food inflation has gone up to 4.6 per cent compared with 3.3 per cent of the corresponding period last year.
The increase in inflation was due to price hike of some core items like wheat, beef, mutton, wheat flour, vegetable ghee and onions in the last five months. During July-March (three quarters), the tax collection stood at Rs352 billion as against Rs310 billion of the comparable period last, up by 13.6 per cent.
It was also Rs10.4 billion higher than Rs342 billion target set by the government at the time of budget announcement last year. Direct taxes have increased by 9.2 per cent, while indirect taxes increased by 15.5 per cent. Within indirect taxes, sales tax has increased by 11.9 per cent and customs collection is up by 39.0 per cent.
"There are indications that, like last year (2002-03), most of the targets of the key economic indicators will be surpassed by significant margins," said the review. The water availability has increased by 29 per cent during the current fiscal year and fertilizer offtake during the Rabi season has increased by 11 per cent.
The wheat crop is sown on an area of 8.2 million hectares against the target of 8.1 million hectares during the current season. The size of the wheat crop is expected to be in the range of 20.3 to 20.5 million tons against the target of 20 million tons.
The cotton production was targeted at 10.5 million bales, however, taking into account arrivals at ginneries the production is estimated at 10.3 million bales. The sugarcane area and production targets for 2003-04 were set at one million hectares and 48 million tons, respectively. However, sugarcane crop is sown on 1.1 million hectares and production is estimated at 53.8 million tons - 3.5 per cent higher than last year.
The rice area and production targets were set at 2.23 million hectares and 4.3 million tons, respectively. Rice is sown on 2.45 million hectares and the production estimates are at 4.87 million tons - 8.9 per cent higher than last year. The large-scale manufacturing (LSM) was targeted to grow by 8.8 per cent in 2003-04.
During the first eight months of the current fiscal year 2003-04, large-scale manufacturing registered a broad-based growth of 15 per cent as against 7.7 per cent in the comparable period of last year and much higher than targeted growth for the year.
Overall money supply grew by 12.4 per cent during July 1, 2003 to March 27, 2004 as against 12.1 per cent in the same period last year. Monetary supply is targeted to increase by 11.1 per cent during the fiscal year 2003-04.
Credit to the private sector amounted to Rs237 billion during the same period, which is almost two-and-a-half times higher than Rs101 billion of the corresponding period of last year.
The Karachi Stock Exchange 100-Index has moved up from 3,433 points on July 1, 2003 to 5,582.3 points as on April 16, 2004 - showing an increase of 62.6 per cent. The market capitalization increased from Rs754 billion to Rs1,489.5 billion in the same period, which implies an increase of 97.5 per cent.
In dollar terms, the market capitalization moved from $13 billion to $25.9 billion - thereby, showing an increase of 99.2 per cent and emerged as the sixth best performing stock market in the world during 2003.
Exports are targeted to increase by 8.4 per cent to $12.1 billion in 2003-04. Exports during July-March 2003-04 registered an increase of 13.3 per cent - from $7.856 billion to $8.902 billion. Exports during the current fiscal year are likely to cross the target.
Imports during the same period have increased by 16.3 per cent - from $9,029.8 million to $10,502.1 million. Non-food, non-oil imports basically representing the imports of machinery, raw materials and capital goods, increased by 30 per cent during July-March 2003-04.
Trade deficit stood at $1.6 billion in July-March 2003-04 as against $1.174 billion of comparable period of last year. Current account balance remained in surplus during July-January 2003-04. With and without official transfers, the current account surplus amounted to $1.855 billion and $1.422 billion, respectively, against the whole year target of $0.5 billion (or 0.6 per cent of GDP).
Workers' remittances during July-March 2003-04 amounted to $2.875 billion as against $3.230 billion in the comparable period of last year. When viewed against the target of $3.6 billion or $300 million per month, the inflow of remittances is $175 million higher than the target.
Foreign exchange reserves stood at $12.565 billion as on April 15, 2004. It was $10.729 billion at end-June 2003, showing an increase of 17.1 per cent from June 2003. Exchange rate on April 15, 2004 has been Rs57.5 per US dollar in the inter-bank market. Exchange rate (Pak rupee) has appreciated marginally by 0.3 per cent since June 2003.
