ISLAMABAD: The Annual Plan 2016-17 released with the budget documents declares the growth prospects positive with a rebound of the industrial sector, improvement in energy and security situation.

It states that the GDP target of 5.7 per cent would be achieved with contributions of 3.5pc growth in agriculture; 7.7pc in industry; and 5.7pc services sector. Investment is targeted at 17.7pc of GDP.

However, the growth targets are subject to risks of weather fluctuations, interruption in reforms, warns the Planning Commission which produced the Annual Plan document.

It further warns that the repercussions of the poor performance of agriculture sector during the outgoing fiscal year particularly the failure of cotton crop can act as a drag on growth in the year ahead.

The fixed investment is expected to grow to 16.1pc of GDP in 2016-17. The national savings as a percentage of GDP is targeted at 16.2pc. The Public Sector Development Programme for 2016-17, CPEC initiatives and all policies are geared towards achieving these targets, the document noted.

AGRICULTURE: The agriculture sector is targeted to grow by 3.6pc on the basis of expected contributions of important crops (2.5pc), other crops (3.2pc), cotton ginned (2.5pc), livestock (4pc), and fishery (3pc).

Adequate production of next year’s cotton crop is dependent upon efficient pest management, favourable weather conditions and profitable commodity price. However, given the subdued international prices, reduction in cotton sowing area and lack of farmers’ interest in the crop due to shrinking profits, the prospects of satisfactory cotton remain precarious. This is likely to depress the overall growth of important crops, the Planning Commission warns. However, the growth prospects for livestock, fishery and minor crops are bright.

INDUSTRY: The industrial sector is expected to grow by 7.7pc during next fiscal year on the back of better energy supply and planned investment under the CPEC. The mining and quarrying sector is projected to grow by 7.4pc. Besides, the manufacturing sector is expected to grow by 6.1pc for 2016-17, the LSM’s growth rate of 5.9pc, small and household manufacturing 8.2pc, construction by 13.2pc and electricity, generation and gas distribution by 12.5pc. Demand for housing and spur in construction industry will increase demand for cement and iron substantially.

Overall, it is expected that improved energy availability, better law and order situation, low interest rate with the subdued inflation and continued macroeconomic stabilisation will play a major role in achieving the next year’s target of industrial growth.

SERVICE: The growth by 5.7pc of the services sector will be contributed by 5.1pc in transportation, communication and storage, 5.5pc in wholesale and retail trade, 7.2pc in finance and insurance, 4pc in housing, 7pc in the general government services and 6.7pc in other private services sector.

With continuous improvement in the law and order situation and development of basic infrastructure, the tourism industry of Pakistan will gain momentum and generate socio-economic remunerations.

INVESTMENT AND SAVINGS: Investment is targeted at 17.7pc of GDP. The fixed investment is expected to grow at 16.1pc of GDP in 2016-17. The national savings, as percentage of GDP, is targeted at 16.2pc.

The investment under the CPEC is expected to improve the overall investment climate. Further, improvement in the investment-friendly environment as a result of affordable energy, increased profitability, high capacity utilisation rate, finance availability and reduced political and economic uncertainty will help attain the investment target for 2016-17.

Published in Dawn, June 4th, 2016