Embed Doc
Copy Link
Readcast
Collections

CommentGo Back

Download

Economic Survey 2008-09 has been released by Finance Ministry of Pakistan and itseems our economy didn’t perform as expected. Below is the small summary while thecomplete

Pakistan

Economic Survey 2008-2009

can be downloaded byclicking here.Its in a pdf Format.Despite inhospitable domestic and international environment, Pakistan’s economy grew by 2 percent in the financial year 2008-09.According to Economic Survey 2008-09, launched jointly by Advisor to Prime Minister on Finance, Shaukat Tarin and Minister of State for Finance, Hina Rabbani Khar, here onThursday, the economic growth of 2.0 percent seems reasonable although it impliesdefinite slippage against 4.1 percent growth of last year and this year’s target of 4.5 percent.Addressing the press conference, Shaukat Tarin said that the economic growth of Pakistan should be looked in the backdrop of global recession where positive growth is arare exception.He said that microeconomic crisis, trade shock, global recession and domestic securitychallenges were the main hurdles in the way of economic growth of the country duringthe current financial year.He described the year 2008-09 as ‘Year of consolidation’ for the revival of economy,saying that the current government inherited economic setbacks from the previousgovernment.Advisor to Prime Minister on Finance, Shaukat Tarin said that the agriculture sector depicted a stellar growth of 4.7 percent, as compared to 1.1 percent witnessed last year and the target of 3.5 percent for the year.However, the overall FBR tax collection remained less than satisfactory and witnesseddeceleration in real terms. Resultantly, the FBR tax collection to GDP ratio is likely todeteriorate to around 9 percent of GDP as against the target of bringing it in the vicinityof 10 percent of GDP.Tarin said that FBR would broaden its tax base by bringing those services and other sectors into the tax net who are still avoiding tax payment but contributing to the GDP.Output in the manufacturing sector contracted by 3.3 percent in 2008-09 as compared toexpansion of 4.8 percent last year and target of 6.1 percent. Small and mediummanufacturing sector maintained its healthy growth of last year at 7.5 percent.Large-scale manufacturing depicted contraction of 7.7 percent as against expansion of 4.0 percent in the last year and 5.5 percent target for the year.He added that the massive contraction has been because of acute energy outrages,security environment and political disruption in March 2009.

The services sector grew by 3.6 percent as against the target of 6.1 percent and last year’sactual growth of 6.6 percent.Value-added in the wholesale and retail trade sector grew at 3.1 percent as compared to5.3 percent in last year and target for the year of 5.4 percent.Finance and insurance sector witnessed registered negative growth of 1.2 percent in2008-09 he said adding that the performance of the sector shows that Pakistan’s financialsector was integrated in the world economy and is feeling the heat of the crisis plaguinginternational financial markets.He said that the transport sector and communication sub-sector depicted a sharpdeceleration in growth to 2.9 percent in 2008-09 as compared to 5.7 percent of last year.Pakistan’s per capita real income has risen by 2.5 percent in 2008-09 as against 3.4 percent last year. Per capita income in dollar terms rose from $1042 last year to $1046 in2008-09, thereby showing marginal increase of 0.3 percent.Advisor to Prime Minister on Finance, Shaukat Tarin said that total investment declinedfrom 22.5 percent of GDP in 2006-07 to 19.7 percent of GDP in 2008-09.He said that fixed investment decreased to 18.1 percent of GDP from 20.4 percent lastyear adding that private sector investment was decelerating persistently since 2004-05and its ratio to GDP declined from 15.7 percent in 2004-05 to 13.2 percent in 2008-09.Public sector investment to GDP ratio has risen persistently from 4.0 percent in 2002-03to 5.6 percent in 2006-07. However, it declined to 4.9 percent in 2008-09. National savings rate has declined to 14.4 percent of GDP in 2008-09 as against 13.5 percent of GDP last year. Domestic savings also declined substantially from 16.3 percentof GDP in 2005-06 to 11.2 percent of GDP in 2008-09.The overall foreign investment during the first ten months has declined by 42.7 percentand stood at $2.2 billion as against $3.9 billion in the comparable period of last year.Foreign direct investment private showed some resilience and stood at $3205.4 millionduring July-April (2008-09) as against $3719.1 million in the corresponding period of last year, thereby showing a decline of 13.8 percent.Private portfolio investment on the other hand showed a net outflow of $451.5 million asagainst net flow of $98.9 million during the same period of last year.During 2007-08, the SBP continue with tight monetary policy stance thrice rising thediscount rate and increased the cash reserves requirements and statutory liquidityrequirements. During July-May 2008-09 money supply (M2) declined 4.59 percentagainst 8.96 percent last year. Net domestic assets (NDA) was limited to just Rs 442.1 billion as compared to Rs.655.4 billion in the FY 08. During FY 09, the slow expansion in private sector credit has led toslow growth NDA of the banking system. This is shared both by NDA of SBP andScheduled Banks. Net foreign assets of the banking system recorded a decline of over Rs.227.1 billionduring the first ten months of the current fiscal year to May 9, he added.He said that the government’s budgetary borrowing from the banking system decreased