ISLAMABAD: The government on Wednesday announced it is going to miss the economic growth target for 2016-17 because of an underperformance by the industrial and services sectors.
This will be the fourth year in a row that the PML-N government has missed the annual economic growth rate target.
The economy grew at the rate of 5.28 per cent against the projected rate of 5.7pc in 2016-17. It is the fastest pace of growth since 2006-07 when GDP expanded by 6.8pc.
The target was 5.5pc last year, but the growth rate remained 4.51pc.
Misses target for fourth year in a row
Growth targets were also revised downwards to 4.06pc in 2014-15 and 4.1pc in 2013-14.
The mater was discussed in a meeting of the National Accounts Committee (NAC) on Wednesday. Only 10 out of 20 key growth indicators were on target, NAC documents showed. The growth rate, however, is provisional as final numbers for the full year will firm up later.
The agriculture sector, which contracted in 2015-16, witnessed growth of 3.46pc, just below its target of 3.5pc, in the outgoing fiscal year.
Major crops recorded growth of 4.12pc against the target of 2.5pc. Growth in the production of five important crops, namely wheat, maize, rice, sugarcane and cotton, is estimated to be 0.5pc, 16.3pc, 0.7pc, 12.4pc and 7.6pc, respectively.
There is a fear that the low yield of minor crops can lead to higher food inflation. Other crops are estimated to post growth of 0.21pc against the target of 3.2pc.
Livestock, the second largest sub-sector of agriculture, posted growth of 3.43pc against the target of 4pc.
The fishery sector expanded 1.23pc against 3pc last year. Forestry grew 14.49pc against the target of 3pc. Growth in fishery and forestry reflected the last year’s trend.
The industrial sector posted growth of 5.02pc against the target of 7.7pc in 2016-17. Last year, it grew 5.80pc. The mining and quarrying sector recorded growth of 1.34pc against the target of 7.4pc. Manufacturing recorded growth of 5.27pc against the target of 6.1pc. Growth in the manufacturing sector was 3.66pc last year.
Large-scale manufacturing posted growth of 4.93pc against the target of 5.4pc. Small-scale manufacturing expanded 8.18pc against the target of 8.2pc while slaughtering grew 3.61pc against the target of 3.7pc. Major contributors to this growth were sugar (29.33pc), cement (7.19pc), tractors (72.9pc), trucks (39.31pc) and buses (19.71pc).
Growth in the construction sector was 9.05pc compared to 14.60pc last year. It missed its growth target (13.2pc) for the outgoing fiscal year. Supply of electricity and gas also depicted growth of 3.40pc against the target of 12.5pc. The electricity and gas sub-sector showed low growth due to reduced subsidies for K-Electric and Wapda and its companies.
The services sector grew 5.98pc in 2016-17 against the target of 5.7pc. Last year, it grew 5.55pc. Major contributors were the general government services, which rose 6.91pc against the target of 7pc. It was mainly driven by the increase in salaries and inflation.
Finance and insurance grew 10.77pc against the target of 7.2pc mainly because of high growth of deposits (15pc) and loans (11pc). The housing services depicted growth of 3.99pc against the target of 3.99pc. Transport, storage and communication rose 3.94pc against the target of 5.1pc.
Wholesale and retail trade witnessed growth of 6.82pc against the target of 5.5pc in the outgoing fiscal year. It depends on the output of agriculture, manufacturing and imports. Agriculture increased 3.46pc, manufacturing 5.27pc and imports 19.32pc.
Published in Dawn, May 18th, 2017