ISLAMABAD, May 17: The government on Tuesday set a target of seven per cent growth rate of GDP for 2005-06 on the basis of an expected five per cent growth in agriculture, 10.7 per cent in manufacturing and 6.3 per cent in services sector. The decision was taken at a meeting of the Annual Plan Coordination Committee (APCC) here, which finalised the annual plan for 2005-06. Prime Minister Shaukat Aziz presided over the initial session of the meeting which was later presided over by Deputy Chairman, Planning Commission, Dr Akram Sheikh.
The meeting set a cotton production target of 15 million bales and wheat production of 22.139 million tons for the next fiscal year against 14.6 million bales and 21.4 million tons production, respectively, during current year. The seven per cent growth rate will have to be achieved through larger investment both in public and private sectors, including foreign private investment.
The total size of the GDP has been estimated to grow from Rs6.299 trillion in 2004-05 to Rs7.245 trillion in 2005-06. Similarly, net factor income from abroad has been projected to go up from Rs81.5 billion during current year to Rs98.9 billion next year, thus increasing the size of the GNP (gross national product) from Rs6.38 trillion in this year to Rs7.344 trillion next year.
The agriculture target of five per cent has been linked to the existing production of major and minor crops and sub-sectors like livestock, fishery and forestry on the premise of expected higher water availability, adoption of water saving techniques, improved pest control and changes in cropping patterns.
The output of major crops has been targeted to grow by 5.4 per cent, minor crops by 4.6 per cent (same as in current year), livestock by 4.6 per cent, fishing by 4.1 per cent and forestry by 4.5 per cent.
The value addition of major crops is targeted to grow by 5.4 per cent compared with 5.3 per cent witnessed during 2004-05. The sugarcane production is targeted at 50.095 million tons against 45.3 million tons during the current year. Rice and maize production are estimated to grow at five million tons and 2.9 million tons, respectively, against production of 4.99 million tons and 2.774 million tons, respectively, during current year.
The growth target for mining and quarrying sectors has been fixed at 5.8 per cent which has been the same during 2004-05.
MANUFACTURING: The manufacturing sector has been targeted to grow by 10.7 per cent, a rate envisioned to consolidate the higher growth rates achieved on the average of 9.1 per cent during 2004-05.
CONSTRUCTION: A major growth momentum is expected in the construction industry which has been forecast to grow by 9.2 per cent against an estimated growth of 10 per cent during 2004-05.
ENERGY: The electricity, gas and water supply sectors have been projected to grow at the rate of 9.5 per cent (same as this year) owing to greater hydropower generation and recovery from the impact of drought and higher oil bill.
SERVICES: The services sector has been targeted to grow by 6.3 per cent. The main contributors of value addition in this sector will be sub-sectors like transport and communication, wholesale and retail trade and finance and insurance which are targeted to grow by five per cent, 8.4 per cent and 3.4 per cent, respectively.
INVESTMENT: The total investment has been targeted at Rs1.535 trillion (21.8 per cent of GDP) during 2005-06. The increased flow of investment has been based on the assumption of a favourable investment climate. About 73.5 per cent of fixed investment will be covered by private sector and remaining 26.5 per cent by public sector.
As a ratio of GDP, public and private sector investments are targeted to be at 5.2 per cent and 14.4 per cent, respectively.
INFLATION: The target rate of inflation (CPI) has been placed at eight per cent against 10 per cent during current year.
TRADE ACCOUNT: The target for imports has been fixed at $18.9 billion against an export target of $15.67 billion, thus anticipating a trade deficit of $3.229 billion.
Exports are expected to grow by 11.92 per cent and imports by 12.96 per cent. Imports are expected to increase due to increased payments for capital goods, raw materials, POL, fertilizers and edible oils.
INVISIBLE ACCOUNT: Remittances have been projected at $3.91 billion against $3.9 billion during 2004-05.
Allowing for other invisible receipts and payments, the surplus on invisibles account is anticipated to decrease to $1.608 billion from $1.624 billion during 2004-05.
CURRENT ACCOUNT BALANCE: With a deficit of $3.229 billion on the trade account and a surplus of $1.608 billion on the invisible account, the current account deficit has been estimated to increase to $1.621 billion (1.4 per cent of GDP) in 2005-06 from $1.106 billion (1.1 per cent of GDP) in 2004-05.
CAPITAL ACCOUNT: Gross aid disbursements are estimated to decrease from $2.246 billion in 2004-05 to $1.428 billion in 2005-06. Allowing for other capital flows, the capital requirement is estimated to increase from $3.179 billion in current year to $3.546 billion next year.
The financing of these requirements will be made through normal disbursements of medium and long term loans, capital and foreign investment and exceptional financing to be financed through multinational institutions.
It has been envisaged that disbursement of medium and long term loans will decrease from $2.246 billion in 2004-05 to $1.428 billion in 2005-06.
