Economy grows 4.1 percent in 2009-10

[ameer219]

Economy grows 4.1 percent in 2009-10


Business Recorder [Pakistan's First Financial Daily]

ISLAMABAD (May 23 2010): Pakistan's economy likely grew by 4.1 percent in the fiscal year ending on June 30, above a target of 3.3 percent, and is expected to grow even faster in the next fiscal year. Nuclear-armed Pakistan, a critical US ally fighting to quell a growing Islamist militancy, has struggled to revive its sluggish economy which, government officials say, has now started to show signs of stability.

The government had earlier expected 3.3 percent economic growth in the 2009/10 (July-June) fiscal year, but officials said a rebound in the large-scale manufacturing sector and a strong performance in services sector contributed to the higher growth projection.

The Planning Commission, which prepares the growth targets, held a meeting on Friday to review economic performance and set targets for the next fiscal year. "During the current fiscal year the achieved GDP (gross domestic product) growth rate is 4.1 percent as against the target growth rate of 3.3 percent," the Planning Commission said in a statement late on Friday. "The GDP growth for the next year has been projected at 4.5 percent on assumptions that the agriculture sector will grow by 3.8 percent, manufacturing sector by 5.6 percent and the services sector by 4.7 percent," the commission said.

Large-scale manufacturing contributed a major share to the growth in the outgoing fiscal year, with a 4.4 percent increase, after having declined to 3.7 percent in the 2008/09 year, a Planning Commission official said. The services sector surpassed its 3.9 percent target and grew by 4.6 percent in the 2009/10 fiscal year, the official said adding that the next year's target has been set at 4.7 percent.

The agriculture sector's growth fell to 2 percent in 2009/10 against 4 percent last year, but it was showing signs of stability, the official said. Lower production of major crops, including that of sugar, was a major reason for the decline. The National Economic Council, a top economic-decision making body, will meet on May 28 to give final approval to the yearly targets.

The commission has recommended an inflation target of 8 percent for the next fiscal year, the official said. The central bank has forecast inflation for the whole of 2009/10 to average between 11.0 and 12.0 percent. The consumer price index (CPI), a key indicator of inflation, rose 13.26 percent in April from a year ago.

The central bank is widely expected to keep its key policy rate unchanged at 12.5 percent when it sets monetary policy for the next two months on Monday, as inflation still poses a threat, it has said. The IMF, which bailed out Pakistan in 2008 to avert a balance of payments crisis, has repeatedly urged caution in cutting rates, listing persistent inflation as one of the worries for Pakistan's economy.

Copyright Reuters, 2010


This is fantastic news for Pakistan! Our economy is back on track and we are rising again. Inshallah we will be the 2nd fastest growing economy again!

 

[Hyde]

yeah i read that news on brecorder

Its good to see GDP Nominal increased to 176 billion dollars

Hopefully we can push gdp growth to above 6% and that would be awesome!

 

[IRA]

Given the state of our factories and mills, I'm not sure if this news item can be relied upon. Atleast in the twin cities, I have seen not just common people worried becuz of closing factories (due to electricity crisis) but also some factory and mill owners. They're all complaining about their businesses being shut down or margins being significantly reduced due to heavy costs of fuel (for operations as well as for generators).
I hope I'm wrong but the figures don't seem to match the ground realities.

 

[IRA]

btw if our GDP can grow 4.1 percent in such extreme conditions (and with Zardari and his cronies at the top) then China's ~11 percent growth doesn't seem so impressive........ rather a poor performance.

 

[gowthamraj]

btw if our GDP can grow 4.1 percent in such extreme conditions (and with Zardari and his cronies at the top) then China's ~11 percent growth doesn't seem so impressive........ rather a poor performance.

Sir 11percent growth is not a joke. And more importantly that put a china a fastest growing economy in the world with average of 10.1 percent in last decade. . Second fastest growing INDIAN economy India registred 7.8 percent growth in last decade



Btw your financial ministries reduce last year growth and added that this year. . Roughly Pakistan may attained 2.5 percent growth this year

 

[ameer219]

Sir 11percent growth is not a joke. And more importantly that put a china a fastest growing economy in the world with average of 10.1 percent in last decade. . Second fastest growing INDIAN economy India registred 7.8 percent growth in last decade



Btw your financial ministries reduce last year growth and added that this year. . Roughly Pakistan may attained 2.5 percent growth this
year

Sir you are mistaken! Pakistan's minister projected at least 3.3% growth this year, but looking at the rate we are improving, they inceased it to 4.5%, due to strong performance in both services and manufacturing sectors. Our energy crisis is already attainig a deficit of 1000MW and below compared to 5000MW the year before due to drastic actions taken by the Govt.

Its amazing how Pakistan, which is dealing with both Taliban and Energy crisis, still manaage to project a growth of 4.1% fiscal year ending on June 30, above a target of 3.3 percent, as explained from the article I posted from BRecorder

 

[PakSher]

Pakistan's economy grows 4.1 percent in 2009/10 : Business Recorder | LATEST NEWS

Pakistan's economy grows 4.1 percent in 2009/10
ISLAMABAD (updated on: May 22, 2010, 12:34 PST): Pakistan's economy likely grew by 4.1 percent in the fiscal year ending on June 30, above a target of 3.3 percent, and is expected to grow even faster in the next fiscal year.

The Planning Commission, which prepares the growth targets, held a meeting on Friday to review economic performance and set targets for the next fiscal year.

"During the current fiscal year the achieved GDP (gross domestic product) growth rate is 4.1 percent as against the target growth rate of 3.3 percent," the Planning Commission said in a statement late on Friday.

"The GDP growth for the next year has been projected at 4.5 percent on assumptions that the agriculture sector will grow by 3.8 percent, manufacturing sector by 5.6 percent and the services sector by 4.7 percent," the commission said.

Large-scale manufacturing contributed a major share to the growth in the outgoing fiscal year, with a 4.4 percent increase, after having declined to 3.7 percent in the 2008/09 year, a Planning Commission official said.

The services sector surpassed its 3.9 percent target and grew by 4.6 percent in the 2009/10 fiscal year, the official said adding that the next year's target has been set at 4.7 percent.

The agriculture sector's growth fell to 2 percent in 2009/10 against 4 percent last year, but it was showing signs of stability, the official said. Lower production of major crops, including that of sugar, was a major reason for the decline.

The National Economic Council, a top economic-decision making body, will meet on May 28 to give final approval to the yearly targets.

INFLATION

The commission has recommended an inflation target of 8 percent for the next fiscal year, the official said. The central bank has forecast inflation for the whole of 2009/10 to average between 11.0 and 12.0 percent.

The consumer price index (CPI), a key indicator of inflation, rose 13.26 percent in April from a year ago.

The central bank is widely expected to keep its key policy rate unchanged at 12.5 percent when it sets monetary policy for the next two months on Monday, as inflation still poses a threat, it has said.

The IMF, which bailed out Pakistan in 2008 to avert a balance of payments crisis, has repeatedly urged caution in cutting rates, listing persistent inflation as one of the worries for Pakistan's economy.

 

[farhan_9909]

MASHALLAH

IF the economy grew by 4.1% frm 2009-10..then it is a very good growth rate in this tought conditions suicide blasts,waziristan operations

last year it was 2.7 and now 4.1%
it is a very good acheivement

 

[Neither Right Nor Wrong]

These are some articles posted on this very forum , was hoping somebody could make some sense out of them.

Govt adopts novel tactic to project higher growth rate


By Khaleeq Kiani


ISLAMABAD, May 16: The government has revised current year’s real economic growth rate at 4.1 per cent – much higher than the 3.3 per cent announced earlier – mainly because of a major downward revision in growth and production figures for the last two years.
Informed sources told Dawn on Sunday that last year’s (2008-09) real economic growth (commonly defined as Gross Domestic Product) rate had been revised downwards to a paltry 1.2 per cent from two per cent announced and hitherto acknowledged by the government. Likewise, the real GDP growth rate for 2007-08 has also been brought down to 3.7 per cent from previous estimates of 4.1 per cent.

The revised growth estimates have been compiled on the basis of reconciled data for the last two years and were expected to be approved by a National Accounts Committee (NAC) meeting to be held on Tuesday (May 18). The NAC, comprising federal and provincial economic ministries and agencies, is the highest forum to approve annual economic data and its findings become the basis of next year’s national economic planning and budget making.

“The downward revision in 2008-09 growth estimates has provided a substantial cushion to push up current year’s growth rate (at constant factor cost of 19992000) by about 1.2 percentage points to 4.1 per cent of GDP,” a government official said. He said there was nothing wrong with the upward revision in current year’s growth rate because reduction in last year’s rate was based on actual and reconciled economic figures.

Other major contributors to growth during the current fiscal year were services (60 per cent contribution), followed by industry at 30 per cent and agriculture 10 per cent. In terms of individual sector, manufacturing accounted for 23 per cent of the current year’s overall growth, followed by wholesale and retail trade at 21 per cent and social and community services at 19 per cent.

This is despite the fact that gross fixed capital formation (GFCF) at current market prices has been estimated to have declined by 0.6 per cent after recording a 5.5 per cent increase in 200809. The private sector has accounted for the decline with an estimated contraction of GFCF of 3.5 per cent for the year. The bulk of the decline has happened in electricity, gas, large-scale manufacturing, transport & communication and finance and insurance. General government GFCF is estimated to have increased by 9.8 per cent.

INDUSTRY: The industry recorded a growth rate of 4.90 per cent this year, significantly higher than the targeted 1.7 per cent. The mining and quarrying contracted by 1.7 per cent against a target of 2 per cent increase over the last year. However, manufacturing is estimated to have grown by 5.1 per cent, substantially higher than the 1.8 per cent growth target.

The sources said that large-scale manufacturing grew by 4.3 per cent during the current year against a target of 1 per cent. Small-scale manufacturing, too, increased at the rate of 7.5 per cent, significantly higher than targeted 3 per cent.

SERVICES SECTOR: Another major contribution in higher than the planned growth rate came from services sector this year. The government had set a growth target of 3.9 per cent for services for the outgoing year but this sector is estimated to have improved by 4.56 per cent.

AGRICULTURE: The sources said the agriculture sector growth rate at 2 per cent had remained significantly short of 3.8 per cent target set for the current year. The government had set a growth rate of 3.5 per cent for major crops but it declined by 0.2 per cent. Likewise, output of minor crops reduced by 1.2 per cent against a growth target of 4 per cent while livestock growth rate was recorded at 4.1 per cent against a target of 4 per cent.

This is despite the fact that output of almost all major crops — except cotton — was lower than last year’s production. For example, the wheat output at 23.864 million tons is 0.7 per cent less than 24.033 million tons last year. Cotton output at 12.7 million bales is 7.4 per cent higher than last year’s 11.8 million bales.

Rice production this year at 6.88 million tons is 1 per cent lower than last year’s 6.95 million tons while sugarcane output at 49.4 million tons was 1.3 per cent less than 50.05 million tons last year or 23 per cent less than 64 million tons in 2007-08. Maize production stood at 3.49 million tons against last year’s 3.59 million tons, down by 3 per cent.

Likewise, gram production stood at 571,000 tons against last year’s 741,000 tons, significantly down by 23 per cent. Jowar and Bajra production were also lower by 6.3 per cent and 1.1 per cent respectively.


Dawn ePaper

NAC’s estimated growth figures may have been fudged


ISLAMABAD: The National Accounts Committee is alleged to have estimated a growth figure of 4.1 per cent for the current year by doctoring the estimates for the growth in the construction, livestock and the wholesale and retail sectors, say analysts.

Independent economists in and outside the government are sceptical about the projected 4 per cent growth for the financial year 2009-10. The National Accounts Committee (NAC) has projected that during the current fiscal year the economy would grow by 4.1 per cent, officials had revealed to The Express Tribune on Friday. Independent economists, however, have attributed this extraordinary showing of the Gross Domestic Product (GDP) to “creative accounting.”

The have found out that the government not only played with last year’s GDP growth numbers by revising them downwards but also allegedly fudged the growth numbers of some of the sectors for this fiscal year. It was not for the first time that economists have unearthed such discrepancies. Last year, the National Accounts Committee showed the GDP growth at 2.24 per cent. Only after criticism from economists did the government revise the numbers downwards to 2 per cent.

Economists said that in order to get advantage of the lower base, the government once again revised last year’s 2 per cent growth number to 1.14 per cent. The NAC is to meet on May 18 to discuss provisional growth figures for the outgoing and the final figures of the previous two financial years. The government earlier estimated that that the national output would remain at 3 per cent. Later on, the projection was revised upward to 3.4 per cent but the final figures are a surprise to many.

The IMF and the Asian Development Bank have also forecast less than 3.5 per cent growth for the current financial year. The Incremental Capital Output Ratio concept says that for growth, investment is needed. The NAC document, according to the officials, reported negative 3.5 per cent growth in fixed private investment in nominal terms and negative growth over 15 per cent in real terms .

“With negative growth in fixed private investment, over 4 per cent growth is surprising”, said a Finance Ministry official. According to an economist, who was the one of the main economic managers during the last regime, the NAC has projected 15 per cent growth in the construction sector. “How could there be 15 per cent growth in the construction sector when the public sector spending is less than the last year and no major construction activity is going on”?

The former Finance Ministry official said that 15 per cent growth in the construction sector would boost the economic growth by 0.3 per cent. Another economist, said private construction falls under ownership and dwelling, thus, 15 per cent growth in the construction sector is “out of the question.” Similarly, in the livestock sector the NAC assessed 4.2 per cent growth for the current fiscal year. Historically, growth in the livestock sector never went beyond 3.5 per cent, said the former official, adding, the manipulation in the livestock sector contributed 0.9 per cent in the total national outlook.

According to the provisional estimates of the NAC, the agriculture sector’s growth target was missed for the consecutive second year. This year the agriculture sector grew by 2.2 per cent against the target of 3.8 per cent. In the wholesale and retail sector the NAC has projected 5.1 per cent growth. “More than one-third growth in the wholesale and retail sector is led by growth in imports and with negative growth in imports over 4 per cent growth is astonishing”, said an economist working in the Ministry of Finance.

GEO Pakistan
UN report forecasts economic growth of 3.2 percent
Updated at: 1941 PST, Thursday, May 06, 2010

ISLAMABAD: The United Nations in its annual report 'Economic and Social Survey of Asia and Pacific' forecasted Pakistan's economic growth at 3.2 per cent during the current financial year.

The survey, an annual publication of Economic and Social Commission on Asia and Pacific (ESCAP) was launched on Thursday in different countries including in Pakistan by former Advisor to Finance Ministry and Director General NUST Business School, Dr. Ashfaq Hassan Khan here on Thursday.

The report said that Pakistan's real GDP would grow at 3.2 percent in 2009-10 against the growth of 2.0 in 2008-09 and 4.1 percent in 2007-08.

The survey report has projected country's inflation at 12 percent during the current financial year against the inflation of 20.8 percent last year and 12 percent in 2007-08, showing a large decrease as compared to the inflation last year.

Regarding savings and investments, ESCAP has forecasted country's gross savings growth at 15.1 percent against 14.4 percent in 2008-09 and 13.4 percent in 2007-08.

On the other hand, the gross investments would grow at 18.5 percent during the year against 19.8 during last year and 21.6 percent during 2007-08, it predicted.

The survey said that Pakistan's economy has been affected not just by the global economic crisis but also by the declining security situation and intensification of conflict linked to terrorism.

The industry, especially large-scale manufacturing suffered the worst due to drop in international demand while also having to cope with acute shortages of electricity.

Improved performance of the service sector offset it to some extent, which grew 3.6 percent during the year, it said adding that a rebound was witnessed in agriculture due to bumper wheat crop.

The report says that anticipated recovery is expected to be supported by the restocking of inventories and a small recovery in exports as the incipient recovery in major economies gather pace.

The large-scale manufacturing sector, which contracted in 2009, is projected to register positive growth during this year.

The report says that Pakistan witnessed a contraction in both of its exports and imports adding that global economic crisis led to a decline in exports by 6 percent while imports contracted at a much faster rate by 11 per cent due to lower domestic demand coupled with massive fall in international oil prices.

Depreciation of domestic currency also played a role in containing imports.

According to the report, strong growth momentum in the workers' remittances continued in 2009 and with over 20 per cent increase the remittances stood at $7.8 billion.

All these developments helped in bringing significant improvement in the current account balance, where deficit of 8.4 per cent of GDP in 2008 was reduced to 5.3 of GDP in 2009.

However, it said that due to global economic slowdown and political and security uncertainties, there was a slackening of capital inflows due o lower FDI inflows, higher portfolio outflows, lower disbursements of loan and higher amortization payments.

The report said that the fiscal deficit has been rising in recent year, which stood at 7.6 percent of GDP in 2008.

The report said that the fiscal performance improved substantially in 2009 due to more stringent fiscal policy while the budget deficit came down to 5.2 per cent of GDP.

It said that performance at revenue side was not very encouraging adding that the government needs to improve tax base and raise the very low tax-to-GDP ration in order to reduce the fiscal deficit to sustainable levels.

The report said that a sustained high and inclusive economic growth was needed for rapid poverty reduction.

Speaking on the occasion, Dr. Ashfaq Hassan said that the recent global economic crisis has given a clear message that there was a need to strike a balance between consumer-based economy and export oriented economy to ensure robust economic growth.

He said that the Asia Pacific became the victim of global financial crisis as countries in this region were having export oriented economic.

He also stressed the need for reducing the fiscal deficit, which would enable government not to borrow money from domestic or international sources and in the long run would help develop sustainable economy.

 

[xenia]

this 4.1% growth rate is becuse govt has revised last years GDP growth downward..making it 1.2% from 2%. hence the rise of 0.8 % this year.....

 

[ice_man]

IMF, WB alarmed at ‘manipulated’ GDP growth

EAC constitutes body to address IFIs concerns

IMF, WB alarmed at ‘manipulated’ GDP growth

Sunday, May 23, 2010
Our economic correspondent

ISLAMABAD: The International Monetary Fund (IMF) and the World Bank got alarmed and expressed grave concern and no confidence in the “manipulated” GDP growth of 4.1 per cent for outgoing fiscal year 2009-10 worked out by the Federal Bureau of Statistics (FBS) and then approved by the National Accounts Committee (NAC), a senior official at Finance Ministry confided to The News.

The official said: “Adviser to Prime Minster on Finance and Revenue Dr Hafeez A Sheikh is also perturbed at the 4.1 per cent GDP growth for current fiscal 2009-10, which has been shown at higher side by the FBS by reducing the reference growth base of the last financial year 2008-09 to 1.1 per cent from 2 per cent.

“Dr Sheikh is currently finding himself in a difficult position before the international financial institutions (IFIs) about explaining and defending the ‘so called’ 4.1 per cent GDP growth.

The 4.1 per cent GDP growth issue is deliberated in length in the meeting of the Economic Advisory Council (EAC), which met here with Dr Hafeez A Sheikh in the chair.

“The EAC to this effect has decided to form a committee on evaluating the national accounts and GDP growth data. The committee, headed by Dy Chairman, Planning Commission, Nadeemul Haq, comprises of Dr Ashfaq Hasan Khan, Dr Rashid Amjad, Saqib Shirani and Dr Ijaz Nabi.”

The meeting is to be held wherein the FBS top officials would be facing the music as the ways and means FBS has used to increase the projected growth of 4.1 per cent for ongoing financial year would be challenged.

In 2007-08, the projected GDP growth was 5.8 per cent, which was reduced to 4.1 per cent by FBS so that base could be tumbled to show increase in the projected growth for 2008-09, which was fixed at 2 per cent. Now the FBS has reduced reference base growth again to increase the projected growth of current fiscal at 4.1 per cent.

In the EAC meeting, Dr Ashfaq Hasan Khan, former DG Debt and Adviser to the Finance Ministry; Dr Rashid Amjad, Chief Economist of the Planning Commission; Saqib Shirani, Adviser to the Finance Ministry, doubted the GDP growth worked out by FBS.

“They questioned the growth of 15 per cent shown by FBS in construction sector, particularly when the public sector development programme of the Federal Government has been slashed to one-half and the private sector construction activities are at near standstill.”

“So much so the financial releases, the official at the Planning Commission said, to the mega projects of Balochistan, have also been reduced substantially despite the clear announcement of the Federal Government that the releases to Balochistan projects will not be reduced under ‘Aghaze Haooq Balochistan’ package. Moreover, in the private sector, no remarkable construction is underway which is why the domestic cement consumption has also tumbled manifold.”

“The projected growth of 4.1 per cent for current fiscal is also questionable, keeping in view the declining rate of investment, high inflation and interest rate, large fiscal deficit, armed conflicts, wars, political instability, corruption, absence of rule of law, high poverty rates, rising debt burden, and weak infrastructure will have negative effects on economic growth.”

“Saqib Shirani told in the EAC that he asked the FBS in National Accounts Committee (NAC) to double check the projected growth in the construction sector, particularly keeping in view the deteriorating security environment, crippling impact of power shortages and mismanagement, persisting double-digit inflation and a higher interest rate environment,” the official said.

However, the EAC press release issued says:” The government takes the suggestions made by the members of Economic Advisory Council very seriously, and these ideas would be reflected in our economic policies.”

This was stated by Dr Abdul Hafeez Shaikh, while chairing the EAC meeting here Saturday afternoon. Addressing the meeting, the adviser to PM on Finance said that the government takes the EAC as its partner and would like to share all economic related information with it in a transparent manner.

He appreciated the competing points of views expressed by the members of the Economic Advisory Council on various issues concerning the national economy. Referring to the difficulties faced in budget making process, Dr Hafeez Shaikh said that today’s budgets cannot be prepared in close door environments.

These days, we have Parliamentary Committees, an enlightened media, economic experts like members of the EAC and the international donors, who not only keep scrutinizing government’s economic policies, but also openly discuss various aspects of the national budget. That is why the government wants to share its policy matters with a forum like EAC and would welcome concrete proposals and feedback from the EAC members.

The EAC discussed a number of issues concerning the national economy, including proposals for the new budget, VAT and other taxation issues, public sector expenditure, expenses on the war on terror and documenting the national economy.

The EAC decided to form a committee on evaluating the national accounts and GDP growth data.

Earlier, the EAC was briefed on the strategy and challenges for the next budget and updates on national growth by the Ministry of Finance.


AEY MERAY AZIIZ HUMWATANOO ISS MEIN BHI MALIAWAT KAA TAREQAA DHOUND LIYA!!! QOUM KAAY WASII TAAR MUFAD MEIN GDP GROWTH RATE CHNGE KAAR DIYA!!!