Economic growth likely to touch 7% next year: Dar

Economic growth likely to touch 7% next year: Dar
By APP
Published: May 4, 2016
According to finance minister, Pakistan focuses on growth and jobs despite security challenges. PHOTO: AFP

ISLAMABAD: Pakistan had been hurt by terrorism and security challenges but was still managing to focus on growth and job creation, Finance Minister Ishaq Dar told CNBC news channel.

“Pakistan’s economy has shown great resilience against the trend in developing countries and emerging markets which have shown negative growth,” said Dar, who was in Frankfurt heading a Pakistani delegation at the annual meeting of the Asian Development Bank (ADB).

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“We achieved a seven-year high growth in the last fiscal year and in the current year we hope to cross 5%. We are aiming to touch 7% in the next two fiscal years,” he said.

“We faced serious challenges apart from macro-economic stability, which is now in order; of these was security and extremism and in June 2014, we took a bold decision to go for an all-out war against terrorism and it’s fairly costly.”

Almost $2.3 billion was expected to be spent on the ongoing operation against the militants.

“I called the challenges faced at the time of general elections in 2013 three major Es – extremism, economy and energy. We’ve had great success so far in achieving macro-economic stability and are now working on growth trajectory and job creation,” Dar said.

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In a bid to help stabilise Pakistan’s economy, the International Monetary Fund (IMF) had approved a $6.2 billion loan facility in 2013 under a three-year programme. By March this year, it has released around $5.5 billion.

Following the last review of Pakistan’s economic performance, the IMF concluded that the country was reaching its fiscal targets and economic activity had continued to gradually gain strength.

In order to build on these gains, further progress, including structural reforms, was needed to achieve a strong and inclusive growth and make the economy more resilient and competitive, it said.

While participating in a seminar on “Asia-Europe Economic Cooperation: Fostering Greater Trade and Investment,” Dar asked Europe and Asia to review their existing arrangements and open up markets by dismantling tariff and non-tariff barriers.

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On infrastructure financing, he said multilateral development banks must come up with new instruments including bonds to bridge the gap. He also spoke about intellectual property rights and the expanding e-commerce.

Published in The Express Tribune, May 4th, 2016.

This is more like a political statement than true.

I will be more than happy to see growth shooting above 5%

Only possible if the global market sees a serious upturn. Last year international trade fell by almost 14%, and consequently the exports of practically every country saw a major drop.

Yes by adding 100% tax on current 3% tax payer... Jhoota makaar tola!

We will achieve this target by 2018.

First he should try to achieve 5% this year

Pakistan’s Economy- Growth rate in 2017 is expected to rise to 4.8 percent the World Bank says.

April 28, 2016

ISLAMABAD, April 28, 2016 – Pakistan continues its modest growth recovery. Growth rate in 2017 is expected to rise to 4.8 percent the World Bank says.

Releasing its twice-a-year Pakistan Development Update, the World Bank applauds the government for restoring economic stability but noted that much of the country’s economic growth was underpinned by external influences such as low oil prices and strong remittances while private and public investments continue to remain low.

“Pakistan has made great progress in restoring macroeconomic stability but much more needs to be done to put Pakistan on a solid, economic growth footing,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “Persistent, steady progress on the structural reform agenda will be necessary if Pakistan is to accelerate its growth recovery and lift millions more out of poverty.”

The latest Pakistan Development Update sets out recent developments across the economy and identifies risks and next steps facing Pakistan’s near-term future before focusing in on a handful of key development challenges.

The report highlights that the pace of Pakistan’s economic growth will accelerate modestly through to 2019. However, significant risks remain and the country should guard against global slowdown by continuing to make key reforms, including expanding the electricity supply, boosting tax revenues, strengthening the business environment and encouraging private sector to invest.

The report identifies services and large-scale manufacturing as the key supply-side drivers of growth. Services are expected to grow over 5 percent in FY2016 while large-scale manufacturing, benefitting from low global commodity prices, is expected to grow between 4 and 4.5 percent. On the demand side, consumption is driving growth, fueled by rising remittances and a loose monetary stance.

The report is optimistic about recent progress in fiscal consolidation, highlighting a 20 percent growth in the revenues of Federal Board of Revenue for the first eight months of FY16. “Fiscal consolidation is one of the most significant reform challenges facing Pakistan today”, said Enrique Blanco Armas, World Bank Lead Economist for Pakistan. “The federal government has kept a tight rein on recurrent expenditure, while continuing to invest in Public Sector Development Program expenditure, a very positive development.”

Workers’ remittances and lower oil prices contributed most to the accumulation in foreign reserves, according to the report. Remittances of $9.7 billion in the first half of FY16 more than compensated for the trade deficit, and oil prices delivered a 9.1 percent fall in the import bill.

The strong balance of payments headline figures, however, mask the structural weaknesses in Pakistan’s export competitiveness. Exports fell by 11.1 percent in the first half of FY16 as a result of softer global demand and domestic bottlenecks. Port charges in Karachi, for example, are nine times higher than those in Dubai and Singapore. Shipping container dwelling times are three times longer than in East Asia. Exporters who want to participate in global supply chains are hamstrung by these constraints.

Aether said:

This is more like a political statement than true.

I will be more than happy to see growth shooting above 5%

Click to expand...

Please explain why you see like this ? and also do you know what growth rate is composed of ?

Kambojaric said:

Only possible if the global market sees a serious upturn. Last year international trade fell by almost 14%, and consequently the exports of practically every country saw a major drop.

Click to expand...

And Deficit in trade also fells down bcas of lower oil prices . e.g i would suggest you to go thru this article before making an statment .
http://www.mining.com/web/are-low-crude-oil-prices-a-boom-or-a-curse-for-the-world-economy/

farhan_9909 said:

First he should try to achieve 5% this year

Click to expand...

Yes it is already more than that (both documented and undocumented) .I will give you a hint .Watch closely LSM specially car sales touching like any thing

I would like to request you all dont go into results so quickly .I am working abroad n people around me French /English and when they talked about Pakistan they are very much anticipating double digit growth for Pak .

volatile said:

Please explain why you see like this ? and also do you know what growth rate is composed of ?

And Deficit in trade also fells down bcas of lower oil prices . e.g i would suggest you to go thru this article before making an statment .
http://www.mining.com/web/are-low-crude-oil-prices-a-boom-or-a-curse-for-the-world-economy/

Yes it is already more than that (both documented and undocumented) .I will give you a hint .Watch closely LSM specially car sales touching like any thing

I would like to request you all dont go into results so quickly .I am working abroad n people around me French /English and when they talked about Pakistan they are very much anticipating double digit growth for Pak .

Click to expand...

LSM stand around 4.3% and i doubt even achieving 5%

farhan_9909 said:

LSM stand around 4.3% and i doubt even achieving 5%

Click to expand...

And do you know what was LSM was last six months back ? My friend LSM is going to be around 8-9 % in coming months if not in double digit .Already steel rates are climbing and local production is going to revive i have some numbers but it will be confidential since it was part of assignment we did but steel sector it self is larger than current LSM segment also Food segment is going to give around 2-3 % growth in coming days .Govt injection of money in Agriculture will sustain GDP size ,

Kambojaric said:

Only possible if the global market sees a serious upturn. Last year international trade fell by almost 14%, and consequently the exports of practically every country saw a major drop.

Click to expand...

Pakistan internally has enough potential for 7% growth for next few years due to bad economy during PPP

close to 6% is possible. Energy supplies have improved due to LNG. LSM growth will pick up. Chinese investment flows will also help.

apart from these two things to be optimistic about, there is not much to cheer currently. Exports are falling. Investment from other than China is also falling. Tax revenue is being generated from multiple layers of indirect taxation. Growth is remittances will also slow down because of low oil prices hurting middle eastern economies.

If it is DAR's calculation then it is only a joke ... may be this much money of Pakistan will be stashed by royals in other countries in upcoming fiscal year.

First let's hit the 5% growth number which is very unlikely for the current fiscal year. Where things stand it's looking to be at 4.6ish. The 5% is however doable for the the next two years before this govt is done. The 7% number can be considered for 2019 and beyond

joke of the year by the clown of PMLN and treasury minister of Pakistan..