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ISLAMABAD, June 17: The government has projected the manufacturing sector to grow by 10.2 per cent, monetary expansion at 11.2 per cent and rate of inflation is estimated to rise to five per cent during the year 2004-05.
According to macroeconomic framework for the year 2004-05, the 10.2 per cent growth rate in manufacturing is envisioned to consolidate the higher growth rates achieved during the past two years.
Normally, the macroeconomic framework is released by the government along with budget documents but has been withheld this year for unknown reasons. The growth rate of manufacturing sector is premised on the growth of the large-scale manufacturing sector's growth of 12 per cent, small and medium manufacturing sector of 7.5 per cent and slaughtering growth of 3.0 per cent.
The automobiles (comprising jeeps, cars, tractors and motorcycles), petroleum products, chemicals, cement, cotton yarn, motor tyres, fertilizer and electronic items like refrigerators, TV sets and transformers would be the main growth industries.
In order to achieve the higher growth target, policy measures will be designed for ensuring availability of adequate credit to private sector, export orientation with competitive edge in the world market and establishing new industrial zones and exploring new foreign markets.
Keeping in view the economic growth and production targets of major commodities and sectors, the rate of inflation during 2004-05 is estimated at around five per cent.
Monetary stocks up to end June 2004 are estimated at Rs2,308.7 billion. Monetary expansion during the year 2003-04 was targeted at Rs230 billion (11.06 per cent). Monetary policy will be designed to have an orientation towards stable growth, with the private sector envisaged as the engine of growth.
During the fiscal year 2004-05, monetary expansion is expected to stay around 11.2 per cent, which would accommodate the real growth of the economy and the expected inflation for the year.
Against the zero growth in 2003-04, the growth target for mining and quarrying sector is fixed at 5.5 per cent for 2004-05, based on 16.2 per cent increase in the extraction of natural gas, 9.2 per cent increase in crude oil production and 5.5 per cent increase in coal output.
Greater foreign investment is expected in the fields of oil, gas and coal. The larger gas availability is expected due to additional gas reservoirs coming up from newly discovered fields.
Limestone and rock salt each are expected to increase by 10 per cent. The present trend of increased use of coal in cement production is expected to continue.
SAVING AND INVESTMENT: The total investment will cross the Rs1 trillion mark. It is targeted at Rs1,138.7 billion during 2004-05 and would be higher than the investment of Rs980 billion estimated for 2003-04.
As a ratio of GDP, total investment is targeted to reach a level of 18.8 per cent against the level of 18.1 per cent achieved in 2003-04. It is expected that 69.8 per cent of fixed investment will be covered by the private sector and remaining 30.2 per cent by the public sector.
Total foreign direct investment is expected to increase many fold from below $1 billion this year to $3-4 billion next year. National savings are expected to increase by 7.1 per cent from Rs1,080 billion in 2003-04 to Rs1,157.7 billion in 2004-05.
The level of national savings is higher than the level of total investment at Rs1,138.7 billion and this reflects a surplus in the current account of balance of payments.
