* Initial estimates suggest GDP growth at 5.5pc
* Growth in agriculture at 1.7pc against target of 4.8pc
* Large-scale manufacturing in industrial sector at 4.8pc against 12.5pc

By Sajid Chaudhry

ISLAMABAD: Pakistan is likely to miss the downwards-revised growth target of gross domestic product (GDP), with estimates suggesting that the GDP growth will remain less than 6 percent in the current fiscal year 2007-08, official sources told Daily Times on Monday.

The National Accounts Committee, which met to finalise the growth estimates for the current fiscal year, was informed about the performance of various economic sectors, said an official privy to the meeting.

After a detailed review of the performance of the each economic sector during the period from July to March, the committee estimated the GDP growth at 5.5 percent.

However, the meeting decided that the latest performance figures of services sector provided by the State Bank of Pakistan would be also be included in the review.

Keeping in view the central bank’s request, GDP estimates for the current fiscal year would be finalised on Tuesday (today), which are expected to be around 5.7-5.9 percent, the official added. Actual GDP growth target for the current fiscal year was 7.2 percent, which was lowered to 6 percent because of the poor performance of agricultural and industrial sectors.

Agricultural growth: The agricultural sector has registered an overall growth of 1.7 percent against the target set at 4.8 percent. Major crops registered a negative growth of 1.7 percent, while minor crops made a negative growth of 2.4 percent in the outgoing fiscal year.

Industrial growth: Industrial production also showed less than the projected growth. Large-scale manufacturing (LSM) grew at a meagre rate of 4.8 percent against the annual growth target of 12.5 percent. Foreign direct investment also witnessed a negative trend of over 30 percent during the current fiscal year, the official said.

Commodity producing sectors were also not able to maintain their growth momentum and recorded a 3.7 percent growth rate against the annual target of 7.4 percent.

However, the services sector again projected a growth of 7.4 percent against the target of 7.1 percent — mainly because of the good performance of the banking, insurance and telecommunication services sectors, the official added.

The official said that growth in services sector suited to mature economies, but not the emerging economies like Pakistan. Although the growth in services sector during the last few years helped the government to show handsome growth, it also resulted in increasing demands and high inflation because of negative trend in commodity sectors, he added.

The official said that an emerging economy like Pakistan could only sustain itself through continuous growth in the agricultural and manufacturing sectors, which ensure food security and help the country enhance its exports for foreign exchange earnings.

He believed that the government would not be able to project a higher GDP growth target for the next fiscal year 2008-09 because of low GDP growth this year.

http://www.dailytimes.com.pk/default.asp?p...0-5-2008_pg1_11

I blame 30~ days of Dar-nomics that we had to suffer through.

Zardari should stop playing political games and assign a full time Finance & commerce minister already. And too someone competent

That is the main problem in pakistan's democracy they are more bothered about there politics and seats rather than the people who voted for them.


SPEEDY
enjoy

Where is dar now a days?

GDP growth expected at 5.78pc



Wednesday, May 21, 2008
ISLAMABAD: Pakistan’s economic growth is likely to slip below a revised target of 6 per cent for the 2007/08 fiscal year, mainly because of lower manufacturing growth and farm output, a government official said on Tuesday.

“Gross domestic product is expected to grow by 5.78 per cent,” said a Finance Ministry official who declined to be identified as he is not authorised to talk to the media.

The projected GDP growth rate, calculated at a meeting of the National Accounts Committee on Monday, is based on data for the first nine months of the fiscal year to March and estimated figures for the remaining three months.

Pakistan had set a 7.2 per cent growth target for gross domestic product (GDP) at the beginning of the July-June fiscal year but revised that to 6 per cent this year, citing weakness in manufacturing and farm-sector growth.

The fiscal year ends on June 30 and the government is expected to announce its budget for 2008/09 early next month.

“Agriculture grew by merely 1.49 per cent against an original target of 4.8 per cent, mainly due to less-than-expected growth in major crops, wheat and cotton,” the official said.

Pakistan’s wheat output this year is expected to be 21.8 million tonnes against a target of 24 million. Early this year the government cut the target for cotton output to 11.6 million bales from a revised 12.8 million and an original target of 14.14 million.

Growth in large-scale manufacturing is estimated to drop to 4.84 per cent, compared with a target of 12.5 per cent.

The service sector was likely to post 8.16 per cent growth thanks to a robust 17 per cent expansion in the banking and insurance sector, the official said.

The government is due to give official growth figures and targets for next year later this month.

The economy, which has averaged annual growth of 7 per cent over the past four years, is under pressure from expanding fiscal and trade deficits, a weakening rupee and inflation, which touched a 30-year high of 17.21 per cent in April.

A coalition government that assumed power nearly two months ago after February elections blames the previous administration for “mismanaging” the economy.

http://thenews.jang.com.pk/daily_detail.asp?id=113720