ISLAMABAD, May 24: The government has estimated 5.3 per cent overall GDP growth rate during fiscal 2003-04 and projected fiscal deficit at 4 per cent of GDP, inflation at 3.9 per cent, monetary growth at 11.3 per cent, development spending at 3.4 per cent of GDP, and forex reserves at $11.54 billion.

Finance Minister Shaukat Aziz told the Annual Plan Coordination Committee (APCC) on Saturday that Pakistan’s economy not only displayed remarkable resilience mainly due to wide ranging structural reforms programme initiated three years back but its economic fundamentals have further been strengthened during the current fiscal year.

He claimed that poverty has flattened and was beginning to show signs of decline. He said that the projected overall GDP growth would focus to consolidate the gains of realized growth and deepen the process of institutionalizing reforms.

The main objective of the fiscal policy would be to reduce the fiscal deficit to below 4 per cent of GDP and to enhance the development expenditure to 3.4 per cent of GDP during 2003-04.

Agriculture sector is anticipated to grow by 4.2 per cent, manufacturing sector at 7.8 per cent, large-scale manufacturing sector at 8.8 per cent and small-scale manufacturing sector at 5.3 per cent during the next financial year.

The total investment is projected at Rs739.5 billion during next year which is 19.1 per cent higher over the level of investment of Rs620.9 billion in 2002-03. Total investment is forecast to reach 16.9 per cent of the GDP against the previous year’s level of 15.6 per cent.

The estimated fixed investment of Rs647.1 billion for 2003-04 includes Rs263.2 billion for public sector and Rs383.9 billion for private sector. This implies that 59.3 per cent of fixed investment will be covered by the private sector. As a ratio of GDP, public and private sector investment are projected to be at 6 per cent and 8.8 per cent respectively.

It is expected that fiscal year 2003-04 may experience deterioration in trade balance due to exports (Fob value), which are projected to grow by 6 per cent while imports (fob) are forecast to increase by 7.5 per cent.

The trade account is projected to be in deficit by $1.231 billion in 2003-04 against $1.002 billion during 2002-03. The workers remittances for fiscal 2003-04 have been projected at $3.60 billion against $4.102 billion for 2002-03 i.e. 12.10 per cent decline.

The gross disbursements of official development assistance (ODA) are expected to increase to $1.719 billion in 2003-04 compared to $1.589 billion in 2002-03.

The monetary expansion is expected to increase by around 11.3 per cent during the fiscal year 2003-04.

The rate of inflation is likely to be contained at the level of 3.5 per cent during fiscal 2002-03, and it is projected that it would be kept at 3.9 per cent during fiscal 2003-04.

On the growth side, the agriculture sector growth is premised on the expectations of improved water availability, water saving techniques and changes in cropping patterns to cope with droughts. The output of major crops is projected to grow by 5.5 per cent and fishing by 4.5 per cent whereas other sub-sectors like minor crops, livestock and forestry are envisaged to grow by 3.5 per cent, 3 per cent, and 5.3 per cent respectively.

The growth rate of the manufacturing sector envisioned on large scale manufacturing sector’s growth of 8.8 per cent and small scale manufacturing sector growth of 5.3 per cent. Sugar, petroleum products, chemicals, cement, cotton yarn and cotton cloth, railway coaches/locomotives, motor vehicles, engineering goods, air-conditioners, cigarettes, motor tyres, fertilizer and some electronics items like refrigerators, TV sets, transformers would be the main growing industries.

The growth target of mining and quarrying sector is fixed at 3.6 per cent because of greater foreign investment is expected especially in the field of oil and gas and coal.

The prospects for electricity and gas distribution during the year 2003-04 are likely to improve as hydropower projects are being accorded more importance and the sector recovers from the adverse impact of drought and higher oil bill. It is projected to grow at a rate of 5.3 per cent during fiscal year 2003-04.

National savings are expected to equal total investment for the year 2003-04, as the current account is likely to be in balance.