ISLAMABAD, May 17: Prime Minister Shaukat Aziz has said that Pakistan’s Gross Domestic Product (GDP) had achieved an impressive growth of 8.35 per cent during the current fiscal year owing to a 7.5 per cent growth in agriculture, 15.4 per cent in large-scale manufacturing (LSM) and 7.9 per cent in the services sector. Addressing the inaugural session of the Annual Plan Coordination Committee (APCC) here on Tuesday, the prime minister said that 8.35 per cent growth had been achieved against the budgeted target of 6.6 per cent, and it might go further up with the completion of wheat arrivals.
The announcement surprised many in the audience who were provided with a different data after the prime minister left the meeting. The data showed a growth rate of seven per cent, indicating 4.8 per cent growth in agriculture, 12.6 per cent in LSM and 6.2 per cent in the services sector. In his speech, the prime minister said it was a historic day for Pakistan. He said the per capita income had increased by 6.43 per cent to over $700. The purchasing power parity is expected to move in the range of $2,200-$2,500 this year.
The growth rate, which exceeded the target by a wide margin, was influenced by a broad-based growth in all sectors, the prime minister said. Manufacturing as a whole increased by 12.2 per cent, while textile sector grew by 24.5 per cent. This was for the fifth time in Pakistan’s 57-year history that a growth rate had exceeded eight per cent. In 1953-54, GDP growth was recorded at 10.2 per cent, while it was 9.4 per cent in 1964-65, 9.8 per cent in 1969-70 and 8.4 per cent in 1984-85, he said.
Mr Aziz said the unprecedented growth of 7.5 per cent in agriculture sector was because of a record harvest of 14.6 million bales of cotton and 21.4 million tons of wheat. The wheat output is expected to go up further as harvest data was still coming up. Quoting a senior official, the prime minister said that higher than targeted cotton output alone had pushed up the growth rate by 0.8 per cent. Major crops grew by 17.3 per cent and financial and insurance sectors grew by 21 per cent, the prime minister said.
Inflation has now been estimated at 10 per cent for the current year against a budgeted target of five per cent. “This shows that increasing investment is taking place and production is going up,” he said. With 8.35 per cent GDP growth, Pakistan would emerge as one of the top five fastest growing countries in Asia, he added.
Mr Aziz said that higher growth in almost all sectors had helped create jobs and resulted in additional liquidity to the market as an additional amount of about Rs35-40 billion had gone into the rural sector, improving the purchasing power of the people and causing emergence of a middle class whose spending would give an equilibrium to the economy.
The prime minister said that there was a need to revise monetary policy to bring inflation down to the single digit and added that he was confident that inflation would be contained to single digit this year. Mr Aziz said that next year’s development budget would be a record while measures would be taken to maintain fiscal deficit despite over Rs40 billion losses accrued under the head of petroleum development levy. He said the government would not lose sight of the fundamental objective of improving the quality of life of people.
He said more investments would have to be made in the education and infrastructure sectors and, more importantly, in the energy sector immediately, otherwise energy shortage could hamper growth.
Infrastructure requirements had increased exponentially to maintain growth rates for which greater efforts would have to be made. However, he said, it was heartening to note that capacity of ports was being augmented and road network was also improving. The prime minister asked the gathering, which included top bureaucrats not to cause delays in the execution of projects. “Don’t give projects to contractors who don’t complete them in time and don’t hire incompetent people,” he said.
He said the high growth rate had been achieved despite the fact that the country had to absorb unprecedented energy price hikes, which forced many countries, including some developed nations, to re-adjust their growth rates. Had there been no energy shock, the growth could have been much higher, he said.
The prime minister said it was a time-tested phenomenon that consistency in policies and continuity of power resulted in sustained economic development, of which Malaysia was a good example.