Re: Pakistan has become one of Asia’s fastest growing economies
**GDP exceeds $100bn mark
**Pakistan’s Gross Domestic Product (GDP) size is likely to cross $100 billion mark by end-June with the revised growth forecasts likely to be placed at 8.3 per cent (provisional) for 2004-05. The Annual Plan Coordination Committee (APCC) meeting scheduled today (Tuesday) under the chairmanship of Prime Minister Shaukat Aziz will review the overall economic performance during the current fiscal year. The meeting will also approve the overall macroeconomic targets for the next year, including growth, investment, savings and the development outlay. Senior official sources said the National Accounts Committee (NAC) meeting has provisionally estimated 8.3 per cent GDP growth rate for the current fiscal year. Last year, Pakistan achieved 6.4 per cent growth rate, including just 2.6 per cent from agriculture and a huge 18.1 per cent from the Large Scale Manufacturing (LSM).
This phenomenal growth rate is strongly supported by the bumper cotton and wheat harvests, which propelled the agriculture sector growth to about 7.6 per cent during the year. The LSM has grown by almost 15 per cent during first seven months of the year. Similarly, the international trade of Pakistan is expected to touch $33 billion, in turn, jacking up the share of the services sector. The Plan Committee is expected to review the estimates and grant approval after adjustments, if required. Last time, it was in 1984-85, when Pakistan achieved 8.7 per cent growth. In the 90s, the highest growth year was 1991-92, when the GDP grew by 7.6 per cent due to bumper agricultural outputs. However, the real dilemma for the Planning Commission was the growth forecasts for the next fiscal year. According to the official sources, repeating the same sort of growth next year would not be possible without sharp increase in investment. Similarly, agriculture production needs to remain buoyant to sustain the overall growth trend at 8 per cent level for the next several years. However, given the water sector situation, much of it would remain just a hope. The Planning Commission officials were reluctant to target 8 per cent or higher growth target for the next fiscal year. “It should not be more than 7 per cent, as we have proposed it in the Medium-Term Development Framework (MTDF).” Given the overall inflationary trends at over 9 per cent during the first three-quarters of the current fiscal year, the APCC is expected to project 7 per cent rate of inflation for the next fiscal year. However, there was a serious debate on the subject. No one expects the food prices to fall to a level, which would bring down the sensitive index of kitchen items below the current levels of 11.8 per cent.
However, the Planning Commission was pushing its demand for Rs 272 billion under the Public Sector Development Programme (PSDP) 2005-06, which would be exactly Rs 70 billion higher than the current year’s level of Rs 202 billion. Though, the Ministry of Finance was in favour of a lower allocation, at somewhere close to Rs 250 billion, the final decision would depend on the prime minister. It was a strong possibility that he would like to allocate a higher sum under the PSDP to ensure that the growth momentum attained during the current fiscal year continues.
http://www.jang.com.pk/thenews/may2005-daily/17-05-2005/main/main5.htm