Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to
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
Comments (34) Closed
Missed target by 0.42%.OK now let's look forward. Current deficit can be overcome by (A) Increasing Exports (B) Inviting Foreign Exchange . Exports can be increased by offering incentives,and Foreign Remittances can be enhanced by encouraging foreign investments FDIs and inviting more remittances from Overseas Pakistanis,unfortunately despite Ministry of Overseas Pakistanis(OP) the service & attitude of government functionaries is like that treating OPs as orphans, they are not prepared to put their mind to understand the subject, and do not respond to their submissions. A PM directive general order be issued to all concerned ministries to deal OPs with care & diligence,and do not defer their needs.
Which growth? Where?
Bravo, now we can stop being called laggards of south asia
5.28% is quite impressive though to remove poverty above 8% is required.
Sorry, but I would not put my money on government numbers. I simply do not trust it.
That's nice. The evidence of rising corruption level also attests to this prosperity!
You have to be really ignorant to believe these numbers! The actual rate is around 4%.
There is still nothing for general public. The top of all is Power & Energy needs continues positive progress. Even if all these positive growth is correctly mentioned, it has a long term effect on nation, provided it keep on progressing and improving.
The growth rate, however, is provisional as final numbers for the full year will firm up later.
Before M Emad, our Bangladeshi brother comes here with his comment on Bangaldesh's economy, I would like to thank Mubarak Zeb Khan for his as-usual excellent detailed piece on the economy. I eagerly await his news stories on economics matters and wish these came more frequantly.
That is good news for pakistan..warm wishes from your neighbor
It was also the fourth year in a row we have exceeded IMF and World Bank's prediction.Honestly if you want the correct growth rate for next year,Just take the average of IMF and government's predicted growth rates and you would be fine.
Next five years outlook is excellent. With CPEC becoming operational, it is only upward trend.
@SV .and on what basis do you say this.they have given us the proof of growth.whats your proof .our do you want us to believe in your ignorance.
I don't know why people are so pessimistic or perhaps they don't live in Pakistan. We have a growing, educated and skilled middle class which has more buying power. Lower class still needs more attention and we need to invest in R&D and industry oriented excellence but we are progressing. Another government is about to fill their tenure and hopefully whoever wins next election, will have his full tenure too. Come on Pakistan.
5.28% is good but not that good, Pakistan has the potential to touch 10% easily with such great youth force if given proper direction and means,may Almighty pour his blessings to Pakistan for better future. Good Luck from your indian brother!!
@Anurag Gautam sahib, a big hearty thank you for your comment from your Pakistani brother. As a student of economics, I am not sure if Pakistan's potential is 10% GDP growth rate, unless something extraordinary happens. Weather changes are making it difficult for our Agriculture to grow significantly, and all our industry leaders do is complain of rising costs of business. I would say that 6% GDP growth rate might well be attainable, which is not bad too.
lower interest rates have spurred the investment and manufacturing to please the government's GDP rate gimmick but people are suffering from higher consumer inflation, even an ordinary vegetable is above Rs 100 kg these days,,,,,,,,,,,let's not talk about the chicken or even daal.
Some encouraging news! Constant decline in exports is a concern though.
@Anurag Gautam Pakistan can manage a near double digit growth , for a long period. Their are many positive things now in Pakistan , like improving law and order, high number of youths, location, presence of large number Pakistani abroad, good knowledge of English etc. However for this kind of growth it has to improve relations with its neighbors.
@Fudayl Z. Ahmad Sir i am not over optimistic at all,10% is not unreachable for pakistan,all the raw material which includes cheaper manpower,youth force,natural minerals and ores,geostrtigic position,water resources etc etc,you name any its there,only requrment is right direction.
Think, after so much hurdles Pakistan is at 5.28% if condition get favourable than sky is the limit.
Agreed with HumorHeartHumanity, besides, the Govt of Pakistan can raise cheap funds from NRPs for infrastructure and other dire needs, Indian Gov has done it very often.
@Fudayl Z. Ahmad dear, you're underestimating power of majority of youth in total population. India & pakistan both are hitting better growth rate compared to developed countries. why? it's not that all of sudden we've became intelligent or something but only reason is, life expectancy in developed countries have improved a lot & consequently majority of their population is old aged (not contributing economically). Whereas in our case a young man even if uneducated, would do some commercial activity be it even miscellaneous. Now this advantage is going to remain with us for 25-30 years, this is the gold time (like power play in cricket). We'll have to engage our youth in development. CPEC is going to provide you infrastructure, now you need to put enough industries to utilize it. Even if corrupt politicians invest money doesn't matter, growth has to come in some form. You must eye for 8%+ but the same is possible only if energy of youth is utilized in right direction
Growth rate hits 9 years high. Anxious times for IK and company
Did anyone notice the growth rate..my economic barometer is dollar parity..We've seen over time that countries that have the best economic growth are those that have good governance, and good governance comes from freedom of communication. It comes from ending corruption. It comes from a populace that can go online and say, 'This politician is corrupt, this administrator, or this public official is corrupt...
With population growing at 3%, this growth rate data is meaningless. We need at least 10% to have any effect.
Impressive. Continous upward trend of economy growth is an indicator of sustainable growth. Keep it up.
Bangladesh FY2016 Growth rate hits highest ever of 7.11pc (Bangladesh bureau of statistics).
No body knows except the "movers and shakers" in Islamabad whether the given growth rate is true or false because in the "land of the pure," anything and everything is possible.
@RAJA CHILL 5.28% is quite impressive though to remove poverty above 8% is required.
Dear Raja, removing poverty is not a reason for any government in Pakistan. They come to power to loot the country with foreign nationalities.
Good luck to people of Pakistan.
Reportedly, the 3 largest sectors of our economy are Services at 56%, Agriculture at 25% and Industry at 19%. Service and Agriculture sectors did well but the Industry sector fell short.
The Services Sector growth at 6% beat the target of 5.7% and it was better than last year’s growth of 5.6%. The Agriculture Sector growth of 3.5% equaled the target. This sector contracted last year. The Industrial Sector, however, grew only at 5.0%, worse than the 7.7% target and the 5.8% growth rate achieved last year. The Supply of Electricity and Gas grew at 3.4% against a target of 12.5%. It is a major shortfall. This is worrying especially because of its knock on affects on the entire economy. I trust that the respective sector primes are doing a thorough analysis of the gains and losses to devise actionable corrective and better growth measures going forward.
M. Emad where are you bhai with your tales of Bangladeshi higher growth rate in a smaller economy? Kya huwa?
@M. Emad Don't compare Bangladesh with Pakistan. Bangladesh is a very small country and 100 times smaller economy than Pakistan. So even they grow 7% or 10% does not matter, they could not catch us next 20 years. You are misleading this comment section every time and not sure why you are allowed here, very suspicious.
@M Imran actually Bangladesh ranks only 3 slots behind Pakistan with Pakistan ranked at 42 and Bangladesh at 46 by nominal GDP rankings. So you should worry as they are catching up fast and will leave you behind in dust within the next decade if the respective growth rates hold.