Today is day for me to talk to Mr.Wiseking for his pessimist estimates for the GDP growth target for 2004-2005. I was projecting the growth target of around 8 pc on the plea of strong industrial sector development and expected growth in agriculture sector. And Mr.Wiseking was giving a very pessimist view and dragged down my expected growth rate even below 7pc. However I insisted it to be above 7pc. Whereas today my estimates were reinforced by news of 8.3 pc growth and above 100 billion dollar economy. Any comments Mr.WiseKing.

Regards

Viva De Le Pakistan

uhh yes, i would like to say something. the higher growth rates are great news, but there is no news or talk of anything above 8%. anyone saying that is either out of their mind, or the journalist who reported it was drunk. shaukat aziz and all other senior finance officials have kept their estimates at around 7%. my estimate, for your info, was between 6.5 to 7%. some have said it would be 7.5% but we'll have to wait and see. so keep your pants on till then. i certainly hope its high, but i'm not going to say anything just yet.

Hopefully you will hear the official estimates soon, but let me give you the The News Link.

http://www.jang.com.pk/thenews/may2005-dai.../main/main5.htm

GDP exceeds $100bn mark

By Nadeem Malik

ISLAMABAD: 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.

PM Shaukat Aziz terms 8.35% GDP growth as historic

Islamabad

May 17 (PPI):

The GDP growth during the current financial year was expected at a record 8.35 % against the set target of 6.6 %, Prime Minister Shaukat Aziz said here on Tuesday. He was inaugurating the Annual Plan Coordination Committee meeting that will approve the annual plan for the next financial year.

(Posted @ 16:45 PST)

Dawn

It does look at least over 8% for THIS YEAR. But also note that for future several years, the outlook is for less than 8% (but still more than 6.5%), which is still good.

Pakistan growth at 20-year high

Gross domestic product in Pakistan is set to top 8% for the first time in 20 years, thanks to wide-reaching reforms to kickstart the economy.

B B C

if instead of giving concesions for the poor people to purchase food..(meaning we pay the companys the mony/ ration cards) we give the mony directly to the poor people who will then have more power to buy...would that not effect our economy in a positive way?

like in the UK....

The figures are of course fake. last years and the year before the GDP growth figures had to be restated DOWNWARDS six months after the year end. This year the Shaukat Tamasha is also in full swing. Even the figures for Agriculture the largest segment of the GDP are falsified by the ministry of Finance and with inflation running at close to 14% all GDP growth figures dont amount to hill of beans.



Daily Times

You and your daily times, maybe I should start posting that Rahul Dikshit's articles for you.

actually, i believe the ministry here is talking about growth in the agricultural sector. how could the food ministry have better economists than the finance ministry. please think before you post. and if you're incapable of doing so, then dont post at all. pakistan will definitely achieve 7% and above growth. its to be seen whether we actually get to 8%. that would really be something. even india would be eating our dust.

On agriculture the Agriculture Ministry which is closer to the ground has the better figures. The Ministry of finance is working on earlier PREDICTIONS of agriculture output. What really angers me is the fact that Pakistan DOESNT need to lie and fix the figures of the growth of its GDP. The REAL figures are preaty good and the process of lying only brings suspicion and doubt on Shaukat Aziz which I believe has far worse consequnces than accepting a real growth figure of 6-7.5 %.

Last 2 years Pakistan has had to quietly restate its GDP growth figures DOWNWARDS after a decent interval had passed , the same is promised this year.

well quite honestly, i dont believe shaukat aziz and his government have a reason to be lying to the country. this is a man known for his impeccable character and thouroughness. he's not someone who would make a statement based on theoretical figures and made up numbers. i will stick with shaukat and the gang and go with near 7% or above growth for the fiscal year.

the government should build the infastructure that limits poakistani companies from being competitve in the world

high speed fiberoptic lines linking paistan to the rest of the world at a cheaper price
(we should do business with china in a way to have a fiber optics link to china so it can link up to the asia paciic region where the message delay is lower)

we have to shorten the message delay of our telephone network which will allow us to do IT work at competive rates with india and other IT giants in the third world

we should also do buisness with chinese companies and ask for ToT for making high quality garments

ten years ago chinese garments were the lowest quality and now they are really high quality, it has the american garment lobby up in arms

we are a garment making company and now we need to make world class garments so that we can compete and sell our products and make hirer profits and then hire more people and....our econmy will be strong

third we need to have laws that will stop corrupt governemnt officials from doing things in the government, in the banks, or else where that jeopardizes our future potiential

small compaines should be encouraged with government grants

So Mr. WiseKing now that the economic figures for 2004-2005 are out and we have certainly achieved the 8.35 pc growth rate, so when are you coming to Islamabad and we might have a lunch/dinner at ur expense at Hotel Serena or PC Bhurban(whom ever you chose) in connection with the forecast bets we had in start of this fiscal year(in case if u remember). Looking forward to seeing you and hearing from you.

Regards

http://www.pakobserver.net/200505/19/Editorial02.asp

A bizzare economic growth
PRIME Minister Shaukat Aziz has said that the country has registered GDP growth rate of 8.35 per cent during the current fiscal year as against the target of 6.6 per cent. Addressing the Annual Plan Coordination Committee in Islamabad on Tuesday, he noted that the per capita income will also consequently rise to 700 dollars plus level. Pakistan will be in the top of five fastest growing economies of Asia this year, he said.

The phenomenal GDP growth rate of 8.35 per cent and increase in the per capita income to 700 dollars has been attributed by the Prime Minister to 7.5 per cent growth in agriculture, 15.4 per cent in large-scale manufacturing and 7.9 per cent in the services sector as well as to the continuity and consistency of policies during the last six years. It’s reportedly the fifth time in Pakistan’s history that it has been able to achieve this level of GDP growth. Interestingly, the announcement of 8.35 per cent growth was not substantiated by the official data circulated at the meeting. The projected GDP growth is seemingly as bizarre as was the official claims of poverty alleviation. The economy related figures in our country have invariably been doctored. In BB’s tenure, the international fiscal agencies had refused to accept the fiscal position projected in the official documents by the then Government. It’s hoped that Pakistan will never land in such a situation again. The Prime Minister’s statement that Pakistan will be among the top five fastest growing economies of Asia this year is certainly a soul inspiring development for the nation. It’s, in fact, a great achievement to bring Pakistan at this position in just five years from a situation of default and negative growth. It has obviously been made possible due to prudent fiscal policies that the Government has pursued. It’s hoped that these will be continued for further economic growth. It’s, however, agonizing to note that the benefits of economic growth are not trickling down to the common man in the country. The masses are least concerned about the figures about the growth rate. They want relief and social justice, which continues to be invisible for them despite tall claims of economic development. It’s hoped that the process of providing relief to the common man will be stepped up and the bureaucratic mindset will not be allowed to impede it.

http://www.dawn.com/2005/05/18/top2.htm

8.3pc growth achieved, says Aziz




By Khaleeq Kiani

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.

Pakistan's growth rate hits 20-year high
By Farhan Bokhari in Islamabad
Published: May 18 2005 03:00 | Last updated: May 18 2005 03:00

Pakistan's economic growth will rise to 8.3 per cent for the financial year to end-June - the highest growth in more than 20 years, Shaukat Aziz, the prime minister, said yesterday.


"This reflects increasing investment and increasing production in the country," Mr Aziz told a meeting of government economic planners. He said Pakistan could become one of the four or five fastest-growing countries in Asia this year.

Mr Aziz said the higher annual growth, up from a target of 6.6 per cent and following last year's 6.4 per cent expansion, was spearheaded by a robust recovery in large-scale manufacturing, set to rise by 15.4 per cent, followed by the services sector at 7.9 per cent and agriculture at 7.5 per cent.

Pakistan's big textile sector, which grew more than 24 per cent, led the rise in large-scale manufacturing. Textile investors are estimated to have poured up to $6bn (€4.7bn, £3.3bn) into the sector in the five years to the end of 2004.

Mr Aziz, a former executive with Citibank who also holds the finance portfolio, is credited with steering the economy to recovery after General Pervez Musharraf took power in a bloodless coup in October 1999. Growth in fiscal 1999/2000 was 3.9 per cent.

Mr Aziz said government economic planners should recommend higher spending on public sector development in next year's budget, expected to be announced in the first week of June, but gave no figures.

He said the high growth rate had created additional liquidity in financial markets, which risked fuelling inflation. "We will have to manage, through monetary policy, to contain inflation in a single-digit range."

The Karachi stock exchange's 100 share index closed 1.6 per cent higher, spurred mainly by yesterday's growth figures.

"It's not just the high growth rate at a macro level. People are now seeing a rise in corporate profits, which is good news for the stock market," said Shuja Rizvi, senior investment analyst at Karachi's Capital One securities house.

But Mr Rizvi also warned there was a danger of inflation rising faster in the coming months. "When economies grow fast, high inflation and rising interest rates are natural possibilities," he said.

Western economists said Pakistan's economic recovery had improved prospects for domestic and foreign investors, although foreign investors were still wary because of concerns about the country's internal security situation, as members of militant groups linked to al- Qaeda remain active.

"The security situation compared to three years ago right after 9/11 may be better, because so many terrorists have been arrested and handed over [to the US]," said a western economist. "Investors, however, are cautious and take a bit of time before making up their mind."

Mr Aziz conceded that in spite of the upturn, Pakistan still faced challenges such as needing to work faster on infrastructure development and undertake programmes to reduce poverty levels. Almost a third of Pakistan's population of about 150m still live in poverty

haha. well we will have to wait for the final figures. you seem to have estimated correctly. unfortunately mr. abbasi, no lunch or dinner for you. just my respect. i live outside the country.

And WiseKing our respect for you has increased for being humble, your insights are most valuable old chap! keep it up

Meanwhile let us all celibrate this News, and be thankful to our Creator and Sustainer, the Lord of the Worlds! Who has blessed and will continue to bless Pakistan!

i appreciate the kind words sardar. thank you. definitely, may Allah continue to bless pakistan and protect it. our country needs a lot of work for it to rise and become a respectable nation. may Allah grant us the leaders that are good for the country.

Any Comments Wiseking, now its very very clear that we exceeded 8 pc growth compared to your pessimist view of less then 7 pc growth rate, waiting for your response.

China Has a New Growth Challenger -- Pakistan: Andy Mukherjee

June 7 (Bloomberg) -- The world's second-fastest growing economy after China is no longer India. It's Pakistan.

According to figures released over the weekend by Pakistan's Prime Minister Shaukat Aziz, the $110 billion economy is estimated to have grown 8.4 percent in the current fiscal year that ends June 30. That compares with 9.5 percent expansion in China's gross domestic product last year, while India recorded 6.9 percent GDP growth in the 12 months ended March 31.

Now that Pakistan is within striking distance of China's growth, it aims to catch up. The growth target for the next fiscal year, as set out in the nation's annual budget yesterday, is as much as 8 percent, the same as Beijing's goal for the year.

That may be a trifle over optimistic. Pakistan isn't yet ready to sustain 8 percent growth year after year -- not until it can push up its savings rate, which is languishing at 14 percent of gross domestic product.

Inflation is at an eight-year high of 11 percent, a clear indication of an economy overheating from too much consumption. (China's problem is too much investment.)

Still, another year of strong growth is eminently achievable in Pakistan, provided the central bank can maneuver deftly to suppress inflationary expectations, even as the government goes ahead and steps up investments in public works.

Even a slightly less rapid expansion than this year would go a long way in boosting personal incomes, which have risen a very impressive 27 percent in U.S. dollar terms in the past two years.

Sept. 11 `Windfall'

Sure, Pakistan's retreat from the brink of a balance-of- payment crisis in 1999 had a lot to do with its Sept. 11 ``windfall,'' as some commentators termed it. Pakistan received grants and debt waivers and additional textile quotas from the Bush administration for helping it topple the Taliban in Afghanistan.

That was in 2001.

In 2005, what's helping sustain growth isn't U.S. largesse, but a revival of investor interest, which is evident from the list of bidders short-listed by the government for a proposed sale of 26 percent in state-owned Pakistan Telecommunication Co.

Bidders for the phone service provider, whose market value is about $5.5 billion, include telecom companies from Singapore, China, Malaysia, United Arab Emirates, Turkey and Saudi Arabia.

Yesterday, the benchmark Karachi Stock Exchange 100 Index plunged 1.5 percent after the government said it would delay the stake sale in the phone company because of pressure from labor unions. The government said it isn't scrapping the sale, which it now expects to go through by end-June.

2007 Election

The risk of such setbacks will remain, though the broad outlines of an investor-friendly regime should stay intact at least until 2007 when President Pervez Musharraf will, according to news reports, shed his army uniform and seek re-election as a civilian. Musharraf, an army general, took power in a coup in October 1999, and appointed himself president in June 2001.

While poverty still remains endemic, and only 18 percent of women aged 35 to 44 are part of the workforce (compared with 96 percent for males in the same age group), a new middle class has started to emerge in Pakistan.

Private consumption is up 17 percent from a year earlier in the 12 months ending June 30. Per capita income has surged to $736. Once Pakistan crosses the $1,000 threshold, like China did last year, it'll become a middle-income country with a lucrative domestic market of 154 million consumers.

Further income growth in Pakistan will require new jobs. And there's no sign yet of a reduction in urban unemployment, which has risen almost 3 percentage points in the last nine years to reach 9.7 percent. For now, GDP growth appears to be driven by more productive use of domestic capital, supplemented lately by an inflow of foreign savings. The current account now has a full- year deficit equal to 1.2 percent of gross domestic product.

Selling Bonds

Capital flows have been buoyant, as Aziz, a former executive at Citibank NA, has made good use of easy global liquidity conditions to raise cheap money from bond sales.

From investor such as Temasek Holdings Pte, the Singapore government's investment arm that bought 25 percent of a Pakistani bank in April, it helps that Pakistan's relations with India are improving as businesses in the two fast-growing economies press for closer ties. The neighbors have fought two of their three wars over Kashmir, a half-century-old dispute that remains unsettled.

There's help coming from another quarter. Raw cotton, yarn, cloth and garments account for three-fifths of Pakistan's overseas shipments. Along with China and India, Pakistan is widely expected to gain from the new quota-free system of global textile trade.

Yesterday's budget scrapped a 15 percent tax on materials imported by the country's textile industry.

A textile windfall would be a big bonus for an economy brimming with optimism, and quite deservedly. After all, it has been two decades since it last grew as fast as this year. Mimicking China's growth may be a tough act to follow, but Pakistan seems determined.

Wiseking didn't turn out so wise in this discussion. No offense buddy.

true, i didnt. remember, pakistan was extremely blessed to have gotten timely rains throughout the season. this growth rate was unexpected. if anything we should thank Allah Almighty. the agricultural growth rate really pushed us above the expected growth. however, if you look at the estimates for the 2005-2006 fiscal year, our financial managers are being realistic and keeping a 7% target, because obviously they too realize that the excellent growth in agriculture will be difficult to duplicate. my estimate was not that off considering the rains were a blessing.

Well when I predicted the 8pc growth the estimates regarding cotton were on grounds that made me to predict 8 pc growth because a 50 pc increase in production of cotton alone can propel agriculture growth rate.

not necessarily. had pakistan not readied itself for the post quota world, its extra cotton production would have meant absolutely nothing. the reason the cotton helped was because it was value added and helped to boost exports, which i understand should get to a reasonable level of $14 billion this year. so just increased cotton production was not enough at the start.

My dear Wiseman ( although not so wise ) the investment in BMR of Textile Industry was started long ago before my one year back projection of 8pc growth rate, the investment in Textile sector for your information was encouraged by Mr.Razzak Dawood under his Textile Vision programme. This visionary man gave us the Textile Vision and also the Engineering Vision before he left the office after the elected government took over. So dont try to say that we had no means of making raw cotton into finished product thus to increase industrial output, it was already there and continuing with its massive investment.