June 10, 2008	Tuesday	Jamadi-us-Sani 05, 1429

ISLAMABAD, June 9: The gross domestic product (GDP) growth rate for the fiscal year 2008-09 has been projected at 5.5 per cent, with estimated contributions of 3.5, 6.1 and 6.1 per cent by agriculture, manufacturing and services sectors respectively.

According to the Economic Survey, to be officially released on Tuesday, the total required investment to attain the projected growth target has been projected at Rs2,638.8 billion, 17 per cent higher than last year’s level.

As a ratio of GDP, total investment is expected to stay around last year’s level (21.5 per cent of GDP). For financing the required investment, national savings as a ratio of GDP are projected to increase to 14.3 per cent in 2008-09.

The inflation rate has been projected at 11 per cent. However, the inflation scenario will remain sensitive to international price movements.

Exports are projected to grow by 16 per cent to $22.9 billion. Imports are projected to increase by 6.5 to $37.2 billion during the next fiscal year.

Remittances have been projected at $7.7 billion and the current account deficit is estimated to be $12.7 billion or 7.7 per cent of GDP.

The survey says the main objective of the fiscal policy will be to keep the deficit within a sustainable limit by furthering reforms in the tax system, broadening tax base, improving tax compliance, minimising tax evasion and allocating adequate resources for development activities.

Monetary expansion will be in line with the projected GDP growth rate of 5.5 per cent and inflation of 11 per cent. “It is imperative that government borrowings be limited to a safe level to keep the money supply growth rate in the vicinity of the targeted level and encourage private sector credit. This will also help in keeping the inflation rate at targeted level,” the survey says.

The Public Sector Development Programme (PSDP) for 2008-09 lays emphasis on maintaining momentum of growth, realisation of core MTDF objectives, especially reducing poverty and achieving the Millennium Development Goals. The size of the PSDP for 2008-09 is Rs523 billion, including foreign loans of Rs67 billion.

The five major priorities of the PSDP are: a comprehensive support programme for the poor, overcoming the water and energy crises, developing Balochistan, the NWFP and special areas, reviving growth in agriculture and manufacturing and building up human resources to compete in a global economy.

An amount of Rs20.3 billion has been allocated for ongoing and fresh agriculture development projects. The water sector has been given high priority with an allocation of Rs75 billion.

An allocation of Rs76.2 billion, including foreign aid of Rs16.3 billion, will be allocated for the power sector in 2008-09. An amount of Rs4.6 billion has been earmarked for the manufacturing sector.

The transport sector has been given Rs60.6 billion, including Rs36.5 billion for the National Highway Authority.

An allocation of Rs6 billion has been made for basic and college education projects. An amount of Rs19.1 billion has been allocated for 260 ongoing development projects of universities.

An amount of Rs4 billion has been allocated for science and technology and Rs5.5 billion for information and communication technology. The allocation for the health sector stands at Rs19.9 billion.