ISLAMABAD, Dec 27: Public and private investments amounting to Rs2,600 billion have been planned to achieve a formidable eight per cent GDP growth in the fiscal year 2007-08.

"We have just finalized broad projections to accomplish eight per cent GDP growth in 2007-08 by ensuring Rs2.6 trillion total investment during that period," said a senior official of the ministry of finance.

He told Dawn here on Monday that total investment worth Rs1.2 trillion had been made during the last 17 months, which included 12 months of 2003-04 and the first five months of the fiscal year 2004-05 with a view to achieving 6.5-7 per cent GDP growth rate during the current financial year.

"We roughly need to spend 22 per cent of GDP to have an eight per cent growth rate in 2007-08 compared to 19.5 per cent of the current financial year and 18.1 per cent of 2003-04," he added.

The private sector, he said, had borrowed Rs500 billion during the first five months of 2004-05, and this borrowing would further increase during the remaining seven months of current financial year.

This private sector borrowing, he pointed out, was helping import machinery, equipment and different kinds of raw material to obtain better industrial growth rate. The industrial growth, he said, had increased by 15 per cent which was good for the overall economy.

Asked whether managing eight per cent GDP growth rate will not be an uphill task, the official said if the population growth rate target of 1.8 per cent was achieved as planned then there should not be any big difficulty to have an eight per cent GDP growth rate at the end of the fiscal year 2007-08.

Responding to a question, he said that achieving eight per cent GDP growth rate would help obtain six per cent real growth in per capita income. He did not agree to a latest IMF report that said poverty was still widespread in Pakistan and that the government needed to take new measures to deal with the issue.

He said since Pakistan was no more opting for fresh lending after the expiry of $1.5 billion Poverty Reduction and Growth Facility (PRGF), IMF officials were trying to exaggerate the issue of poverty in Pakistan. "The poverty is not widespread and in fact it is reducing," the official claimed.

He said Pakistan was seeking IMF's technical support to monitor GDP growth. "But that does not mean that we are accepting any conditionality over the issue," he added.

The World Bank maintains that with political stability, reduction in regional tensions, improved governance and a continued forceful purist of the economic and social reform agenda, Pakistan has good prospects of raising the annual GDP growth to six per cent in the next three to four years and possibly higher in later years and sustaining it at high level, consistent with the progress in debt reduction and a more self-reliant and equitable pattern of development than in the past.

"A centre piece of the growth revival must be the recovery in the fixed investment rate from 13-14 per cent of GDP in recent years to around 17 per cent in 2007 led mainly by the private sector," the bank said in its 2004 report. It added that the high growth in investment over the next few years would require further efforts to improve the investment climate both for domestic and foreign investors.