Assignment OF Macro Economics -1

Submitted To:
Mem Arifa Zaib

Submitted By:
MOEID AWAIS

Roll No: 164226

Subject: Principal of macro economics
Course Code: DECO-302

Program: MBA 3 1\2 Distance Learning

Semester: 3rd

GC UNIVERSITY FAISALABAD
Highlights: Economic Survey of Pakistan 2016-17
 According to the Economic Survey of Pakistan, the country has achieved 5.28 percent
GDP growth during FY 2016-17 as against the target of 5.7 percent, taking the economy
beyond US$ 300 Billion. Despite missing the target, the GDP growth is highest in the
last one decade.
 The actual fiscal deficit during 2016-17 hit its target and stood at 3.8%.
 The inflation in FY 2016-17 clocked at around 4.1%, lower than the expected target of
6%.
 Industrial sector has missed the growth target of 7.7 percent, as it hovered at 5.00
percent during FY 2016-17. Large scale manufacturing sector grew at 4.9 percent as
compared to target of 5.9 percent. Small scale manufacturing sector recorded a growth
of 8.2 percent during ongoing financial year FY 2016-17, almost right on its target.
 The services sector surpassed the growth target of 5.7 percent, as its growth reached 6
percent during FY 2016-17. In services sector, wholesale and retail trade recorded
growth of 6.8 percent against the target of 5.5 percent.
 The growth in agriculture sector hit its target of 3.5 percent in FY 2016-17.
 The national debt now stands at Rupees 20.8 trillion (less than 60% of the GDP) as
compared to the target of 61.4% of GDP for FY 2016-17.
 The Tax Revenue collections of Federal Board of Revenue (FBR) would certainly miss
the target of Rupees 3,621 Billion for FY 2016-17 as the FBR tax revenues for July-
April in FY 2016-17 amassed to Rupees 2,518.7 Billion.
 The non-tax revenue collection for nine months (July-March) FY 2016-17 stood at
Rupees 451 Billion and is highly unlikely to meet the target of Rupees 951 Billion for
the entire financial year.
 The Government also missed the target of enhancing investment to GDP ratio to 17.7
percent, as it clocked at 15.78 percent during FY 2016-17.
 The electricity and gas generations and distributions have recorded growth of 3.4
percent in FY 2016-17 against the target of 12.5 percent.
 The construction sector recorded an impressive growth of 9.05 percent during ongoing
financial year, a bit behind its target of 13.2 percent.

When the present government came into power in 2013 it particularly focused on the revival
of the economy and within a short period of time it achieved considerable gains in restoring
economic stability. After taking measures to restore macroeconomic stability, the
government focused on higher GDP growth that brings better living conditions to the people
through higher increases in per capita incomes, more job opportunities etc. Since 2013-14,
the economy has witnessed a smooth upward trend in growth rate. Real GDP growth was
above four percent in 2013-14 and has smoothly increased during the last four years
to reach 5.28 percent in 2016-17, which is the highest in 10 years.
GDP growth rate

Rate of inflation
Inflation rate remained 4.09% while the volume of Pakistan’s economy surpassed $300 billion.
Fiscal deficit decreases to 4.2 percent
The fiscal deficit of Pakistan has also registered a decrease. From last year when it was 4.6 percent,
the fiscal deficit has been brought down to 4.2 percent. As can be seen, the fiscal deficit has been
decreasing ever since 2012-2013 when it was at a staggering 8.2 percent.

Agriculture
The growth of agriculture has also seen a welcome rise as it jumped from 0.3% in 2015-2016
to 3.5% in 2016-2017.
Services
The services sector has also recorded an increase in growth as it finished at 5.98% in 2016-
2017 compared to last year’s figures which enabled it to stand at 5.70%.

Services
The services sector has also recorded an increase in growth as it finished at 5.98% in 2016-
2017 compared to last year’s figures which enabled it to stand at 5.70%.

Industrial
The industrial growth suffered a decline as it went from 5.80% growth in 2015-2016 to 5.0%
this year.
A sectoral analysis

Industrial
The industrial growth suffered a decline as it went from 5.80% growth in 2015-2016 to 5.0%
this year.
A sectoral analysis of the GDP growth rate of Pakistan
A sectoral analysis briefly summarizes the various components of an economy recording and
registering their growth rates over a number of years.
This data enables the reader to gauge the growth rate that each sector has recorded over a period
of time. Pakistan’s economic sector mainly comprises of industrial, agricultural and services
sector.

Source: Economic Survey of Pakistan 2016-2017

Investment and Savings

Total investment has reached to the level of Rs. 5026 billion as compared to the Rs 4526 billion
last year, showing growth of 11.05 percent in FY 2017. Investment to GDP ratio has reached
15.78 percent in FY 2017. Fixed investment has increased to Rs 4517 billion as compared to
Rs. 4061 billion last year.
National savings were 13.1 percent of GDP in FY2017 against 14.3 percent last year. Domestic
savings are recorded at 7.5 percent of GDP in outgoing fiscal year as compared to 8.2 percent
of GDP last year.
Per capita income
Per capita income is one of the most useful and accurate measures of the well-being of countries
around the world. It is a vital economic indicator that also points out to the economic
development that has taken place in a country.
As per the Economic Survey of Pakistan, the per capita income has seen a growth of 6.4% in
FY2017 as compared to last year when the figure stood a 1.1%.

Foreign Direct Investment

Pakistan also registered a growth in FDI for this year. According to the Economic Surveyof
Pakistan, a 12.75% growth was registered in FDI as compared to last year. Currently,
Pakistan’s FDI stands at Rs. 1.733 billion whereas last year it stood at $1.537 billion.
Major FDI inflows
Major FDI inflows during the period under review were from China ($ 744.4 Million),
Netherland ($478.6 Million), France ($171.0 Million), Turkey ($137.7 Million), US ($103.2
Million), U.A.E ($ 48.4 Million), UK ($47.6 Million), Italy ($ 47.4 Million), Japan ($ 42.1
Million) and Germany ($ 40.5 Million).