ISLAMABAD, March 18: Pakistan is likely to miss some major macroeconomic targets this year, but high agriculture output will enable national economy to show much higher than envisaged seven per cent growth rate, it is learnt.
As a result, the government is expected to revise annual targets for the current year — downwards in areas like foreign trade, current account and prices and upwards in agriculture and services output — in the next few weeks.
Official sources said the government was expecting a bumper wheat crop — reasonably higher than targeted 22 million tons of produce. This, coupled with better production in some other crops and higher livestock production, was expected to put agricultural growth at five per cent, instead of the original target of 4.5 per cent.
The sources said the government was also expecting better results in the services sector. However, the targets for wholesale and retail trade sector are being reduced to 7.2 per cent compared with the original annual target of 8.8 per cent growth.
They said the government had fixed an annual growth target of 7.1 per cent on the basis of six per cent growth in transport and storage, 12 per cent in finance and insurance, 3.5 per cent in housing ownership, 3.7 per cent in public administration and 5.6 per cent in social and personal services.
They said the government had set an inflation target of 6.5 per cent, but this was unlikely to be achieved.
On the basis of seven months data, the annualised rate of inflation as measured by consumer price indicator has stood at 8.14 per cent as against 8.48 per cent during the corresponding period last year. Food inflation has increased from last year’s 7.6 per cent to 10.33 per cent this year and non-food inflation has come down to 6.60 per cent from 9 per cent last year.
Similarly, the sensitive price indicator on annualised basis has almost doubled to 11.84 per cent in the first seven months from 6.58 per cent of the same period last year. Wholesale price index, however, declined to 7.44 per cent compared with 10.97 per cent in the last seven months of last year.
The sources said the government had set export target of $19.8 billion for the current year against $16.8 per cent of the last fiscal year, envisaging 18 per cent growth rate. This target is very unlikely to be achieved given the export performance so far. In the first seven months of the current year, exports have struggled at $9.6 billion, which is only 3.86 per cent higher than last year’s $9.27 billion.
Imports for the current fiscal year were also projected to grow at 16 per cent to $27.4 billion. In the first seven months, however, imports have stood at $17.2 billion against $15.8 billion of the same period last year, recording a growth rate of 9 per cent.
As a result, the trade deficit touched a record $7.6 billion in the first seven months – a figure the government had projected for the whole year. The trade deficit has touched $8.9 billion in the first eight months and is likely to cross $13 billion by the year end. Similarly, the current account deficit is also expected to touch $8.8 billion or so against an annual target of $6.3 billion.
The sources, however, said higher foreign direct investment, remittances coupled with better agricultural output and relatively higher manufacturing growth would enable the GDP not only to achieve 7 per cent growth rate but also take it to near 8 per cent if the current trend continued. However, the current political situation could hamper the growth estimates, they added.
