ISLAMABAD: The government is expected to cut next year’s target for economic growth rate to 5.7 per cent after it missed current year target.

According to a working paper finalised by the Planning Commission for Annual Plan Coordination Committee (APCC) due on May 27, real GDP (gross domestic product) growth was targeted at 5.5pc based on agricultural growth target of 3.9pc, industrial 6.4pc and services by 5.7pc.

The 5.5pc growth rate was missed by a wide margin. The working paper put the provisional GDP growth rate at 4.07pc for the current fiscal year.

Based on base year growth rate of 4.7pc, the target for next year has been revised downward to 5.7pc to be more realistic and to avoid criticism for missing targets.

In the medium term macroeconomic framework announced by the government last year, the GDP was to grow by 6.5pc this year.

The working paper takes pride that GDP growth rate had touched 4.7pc this year (highest in eight years) despite missing the target. The annual plan for 2016-17 envisaged agriculture sector to grow by 3.48pc next year against a contraction of 0.19pc this year.

Important crops are expected to grow by 2.5pc next year against current year’s contraction of a massive 7.19pc while other crops would grow by 3.2pc against this year’s fall of 0.31pc.

The overall industrial sector is targeted to grow by 7.7pc in financial year 2016-17 against current year’s growth of 6.8pc. Of this, mining and quarrying is projected to increase by 7.4pc next year against current year’s increase of 6.8pc.

Manufacturing sector was targeted to grow by 6.06pc next year against this year’s improvement of 5pc.

Likewise, large-scale manufacturing is targeted to increase by 5.9pc against current year’s growth of 4.61pc.

Construction sector was expected to increase by 13.2pc next year against 13.1pc during current year while electricity generation and gas distribution was also expected to increase by 12.5pc next year against 12.18pc increase this year.

The services sector was targeted to go up by 5.73pc next year against 5.7pc in current year.

The size of GDP (measured by market price) was projected to increase to Rs33,063bn next year from current year’s provisional size of Rs29,598bn this year.

The target for next year’s total investment has been estimated at 17.7pc against current year’s 15.2pc of GDP while national savings are projected to grow to 16.1pc of GDP instead of 13.6pc during this year.

Inflation was projected to grow by six per cent next year while per capita gross national product (GNP) has been estimated at Rs179,900 next year against Rs162,569 in current year.

Published in Dawn, May 26th, 2016