KARACHI, Sept 6: Pakistan’s GDP growth during current fiscal year would range between 4 to 4.6 per cent, economists say. But more noticeable than the gap of half a percentage point in calculations by different analysts, is the joyous reality that it would be only the second time in six years that the country’s economy would have posted growth of 4 per cent or more. The last time that GDP growth shot that high was in fiscal year 1999 — at 4.2 per cent.

But even economists are conceding that it is the hand of God that has more to do with the lifting of the country’s economic growth than the efforts of men. After three years of water scarcity — that sparked quarrels among provinces for equitable share — water levels at the country’s two main reservoirs: Mangla and Tarbela, are now full to capacity. “It seems Heavens have smiled on Pakistan — and in particular during a year in which, on the one side neighbouring India is in the throes of worst droughts, while on the other side, China has been hit by incessant floods,” writes InvestCap in the brokerage’s September report.

The government has set the GDP growth target at 4.5 per cent for the current fiscal year, while the Asian Development Bank (ADB) predicts Pakistan’s economy to grow this year at 5 per cent, subject to the pursuit of sound macroeconomic policies.

InvestCap expects GDP growth to touch 4 per cent in the current fiscal year. Analysts affirm that the growth would be propelled largely by the agriculture and the manufacturing sectors. Agriculture growth would be over 3 per cent, analysts predict, which would be aided by around 5 per cent growth in both, large scale manufacturing (LSM) and the services sector.

Agriculture which constitutes 25 per cent to the country’s GDP, has posted a dismal growth of 1.6 per cent on average over the last three years, solely because of the drought situation. Four major crops — cotton, wheat, rice and sugarcane — saw a lower negative growth of 0.3 per cent in financial year 2002, compared with a hefty negative growth of 6.9 per cent the earlier year. Wheat and sugarcane had, respectively, contributed growth of 3 and 12 per cent in the fiscal 2002.

With water reservoirs in Tarbela now spilling over to 1,550 feet and Mangla to 1,205 feet level, rice, sugarcane and cotton are all expected to show higher output over last year, while wheat production may stay put.

“All in all, the four major crops are expected to post 3 per cent growth in financial year 2003, compared with negative contribution towards GDP in the previous two fiscal years,” say analysts at InvestCap.

They visualize a trickle-down effect of a good agriculture sector performance, on the LSM, which could grow by 5 per cent — one per cent above the average growth of 4 per cent in the previous three fiscal years.

Economists at IP Securities held out an even rosier outcome of GDP growth of up to 4.6 per cent this fiscal. These analysts calculate agri-sector growth also to be 3.2 per cent for the year, “as expected shortfall in irrigation water stands reduced from 30 to 10 per cent”. IP Securities foresee LSM sector and the services sectors also to grow by 5 per cent, each. Factors

that would push LSM to growth would include improvement in agri- based industries; revival in construction activities due to increase in remittances and developments on the privatization front of telecom and energy sectors.

Services sector that accounts for a huge 51 per cent of GDP and which has been growing at average of 4.3 per cent in the previous five years, would grow at 5 per cent during current fiscal “benefiting from spending on election activities,” say analysts, but add: “Unlike previous years we are conservative with regard to any major impact due to the surge in salaries of government services.”

And given the regional situation, nobody expects let-up in high defence spending, this fiscal as well.