Annual Plan predicts 4 percent growth in upcoming Fiscal Year

ISLAMABAD:The Gross Domestic Product (GDP) is expected to pick up and grow at 4 percent during the upcoming fiscal year 2019-20, with contribution of 3.5 percent from agriculture, 2.3 percent from Industry and 4.8 percent from services sector, according to Annual Plan 2019-20 released by the government here Tuesday.

According to the plan, the growth targets are subject to risks of extreme weather fluctuations, interruptions in envisaged reforms and non-aligned monetary and fiscal policies.

However, the targets are attainable with revived agriculture sector, growth in industrial sector and pick up in private sector credit and expected competition and spill over effects of projects under China Pakistan Economic Corridor (CPEC).

Meanwhile, in the backdrop of highest-ever macroeconomic imbalances and resultant adjustment drive, the economic growth was anticipated to decelerate during the current fiscal year (2018-19), it said adding that the growth decelerated from 5.5 percent in 2017-18 to 3.3 percent in 2018-19.

Two important commodity producing sectors including agriculture and manufacturing witnessed negative growth due to certain reason.

The Annual Plan targets workers’ remittances to reach the level of US$24 billion during the year 2019-20 while the current account deficit is projected to be contained at 3 percent of GDP.

On fiscal, monitory and Capital Market development side, the government would initiate various reforms for fiscal consolidation during 2019-20, it said adding that the State Bank of Pakistan has started tight monetary policy during FY18 and continued this during FY19.

The average inflation during 2019-20 is projected around 8.5 percent while the capital market is expected to remain vibrant during 2019-20 as a result of the measures to be adopted by the Securities and Exchange Commission of Pakistan.

The exports are projected to reach at $26,187 million in 2019-20 from $24,656 million estimated for FY 2018-29 whereas on account of higher growth trajectory, imports are expected to marginally increase by 0.8 percent and reach the level of $53,664 million in 2019-20 from estimated total of $53,248 million for 2018-19.

The Current Account Deficit (CAD) is projected to be contained at $8,312 million (3% of GDP) during 2019-20 as against estimated deficit of US$13,179 million (4.7% of GDP) by the end of outgoing fiscal year.

The fixed investment is expected to grow to 14.2 percent of GDP in 2019-20 while the National Savings as percentage of GDP are targeted at 12.8 percent.

The capital inflows are projected to decrease from estimated $374 million in 2018-19 to $350 million in 2019-20. The general government disbursements during 2019-20 are expected to remain at the level of $10,493 million against $8240 million estimated for 2018-19 whereas amortization is projected at $10,533 million for 2019-20 against $7,007 million estimated for the current fiscal year.

The foreign direct investment (net) is targeted at $4340 million for 2019-20 against the estimated $1690 million by the end of current year.

In order to strengthen the external sector of economy, effective policy measure are planned to bolster exports, curbing unnecessary imports, enhancing remittances and foreign direct investment inflows.

Strategic Trade Policy Framework (STPF) 2018-23 for enhancing the exports and Trade Related Investment Policy Framework (TRIPF) to attract FDI in export-oriented sectors was being devised in synchronization with other policies so that resolutions and advance taxes are addressed.

The Annual Plan 2019-20 aims to improve the capacity of IT sector by enhancing infrastructure facilities, improving skill quality of human resource and accelerating implementation of public e-service for citizens.

Under the Public Sector Development Programme (PSDP) 2019-20, the government has taken new initiatives such as district equalizaztion programme, interventions in agriculture sector to ensure food security, priorizitization of construction of mega dams for water conservation, interventions in the field of knowledge economy and skill development of youth.

Similarly, interventions in the conservancy of environment and improvement in environment through clean-green Pakistan and 10 billion Tree Tsunami programmes have been initiated.