ISLAMABAD, March 7: The Executive Committee of the National Economic Council (Ecnec) on Wednesday noted that inflation and export growth trailed behind targets but the overall economic growth estimates could still be achieved.

The Ecnec meeting, presided over by Prime Minister Shaukat Aziz, approved 28 projects estimated to cost Rs106.6 billion, including 73 per cent cost over-runs of three ongoing projects from Rs3.3 billion to Rs5.7 billion. The meeting approved 25 new projects to be completed at an estimated cost of Rs100.9 billion, including Rs1.7 billion for engineering design and tender documents of the Diamer-Basha dam.

Deputy Chairman of the Planning Commission and Minister of State Dr Akram Sheikh told newsmen after the meeting that inflation currently stood at eight per cent against a target of 6.5 per cent. Food inflation was over 10 per cent while non-food inflation was at about six per cent and this was an area that required attention, he said.

He said the export growth at four per cent was lower than the target and so was the import growth at nine per cent. The impact of about $1 billion below expectation export growth on the overall economic growth would be about 0.2-0.3 per cent which would be compensated by other sectors. He said exports had been affected by price cuts by traditional competitors like India, China and Bangladesh, but hoped the situation would improve in the coming days.

He said the meeting was satisfied with the overall economic performance and hoped that growth target of seven per cent would be achieved. He said agricultural results were ‘very positive’ and more than five per cent growth was expected while manufacturing and services sectors were also on track.

He said foreign direct investment and foreign remittances were expected to exceed $5 billion each. The FDI amounted to $3.7 billion in the past seven months. All economic fundamentals, he said, were on a strong footing.

He said the meeting also discussed seismological aspects of the Basha dam. He said no part of the country, including Karachi, was safe from earthquakes but that did not mean that projects should not be undertaken.

Referring to the action plan for implementing Diamer-Basha dam, he said some details had been sought from relevant authorities so that a complete case for implementation could be presented to Ecnec for approval. However, the principal decision taken by the president and the federal cabinet to construct five dams would be implemented.

Mr Sheikh said 17 projects were approved in the infrastructure sector at an estimated cost of Rs62.2 billion and 10 projects of Rs41.4 billion in the social sector. These included three projects costing Rs10.5 billion in education sector, four projects costing Rs26.4 billion in the health sector while Rs800 million had been set aside for setting up a medical college in Sargodha.In the infrastructure sector, 10 road projects costing Rs36 billion had been approved. Two water sector projects worth Rs17.8 billion had also been approved, including a self-financed Lower Bari Doab Canal Project with a cost of Rs17.2 billion. A Rs3 billion agriculture research project had been approved, enabling the Pakistan Agricultural Research Council (PARC) to develop drought- and temperature-resistant crops.

A Rs3.1 billion project for computerisation of land record in Punjab had also been approved to improve the collateral value for mortgage financing and its successful implementation would lead to its extension to other parts of the country.

He said the project implementation process had improved because of a justifiable criticism from newspapers in the past few years. Mirani dam had been completed on schedule and at an approved cost of Rs6 billion. Similarly, Chashma Nuclear Project worth Rs700-800 million was ahead of schedule but several projects were behind schedule.

When asked how could the country sustain economic growth in the face of energy shortages both in power and gas sectors, he said that some short-term measures had been undertaken and President Gen Pervez Musharraf had called another meeting on the subject on Thursday.