Pakistan is witnessing today an extra-ordinary buoyancy in its economy, with stage set for economic growth accelerating to seven to eight percent per annum over the next three to four years with the private sector playing a leading role.
According to the latest official report which provides information for the complete fiscal year, a broad-based economic recovery has already gathered momentum, macroeconomic stability has been achieved and the external balance of payments is much stronger today than ever before.
It states that "wide-ranging structural reforms, prudent macroeconomic policies, financial discipline and a consistency and continuity in policies have transformed Pakistan into a stable and resurgent economy."
A higher-than-targeted growth in real Gross Domestic Product (GDP) (6.4pc) supported by stellar growth in large scale manufacturing (16.1pc) and a robust performance in services a strong rebound in investment, particularly in private sector investment; relatively low inflation and an investment-friendly interest rate environment; an unprecedented increase in credit to the private sector; sharp increases in the consumption of electricity and gas reflecting rising levels of economic activity; and a reduction in the fiscal deficit (2.4pc of GDP).
There is above target collection of taxes; a buoyant stock market; a double-digit growth in exports and imports; workers' remittances maintaining their momentum with current account balance remaining in surplus for the third year in a row; FDI continues to exhibit rising trend.
Then, there is comfortable foreign exchange reserves position and a stable exchange rate environment; and a sharp decline in the public and external debt burden are some of the salient features of the current state of the economy.
The sources added that pre-payment of expensive external loan and successful return to the international capital markets through the floatation of a Eurobond were other achievements of the fiscal year 2003-04.
The brief presents a review of the state of Pakistan's economy on the basis of full year information for the fiscal year 2003-04.
The state of economy report entitled 'Pakistan's Economic Survey 2003-04' released by the government on June 10, contained information for the first 9 to 10 months of the fiscal year 2003-04, while this report provides information for the complete fiscal year.
On the real GDP growth, the document says the resurgent Pakistani economy has shown an impressive growth trajectory for the second year in a row.
The real GDP at factor cost was originally targeted to grow at 5.3 percent in 2003-04, with agriculture and manufacturing growing by 4.2 percent and 6.6 percent, respectively.
The real GDP at factor cost in fact grew by 6.4 percent which was supported by 2.6 percent, 18.1 percent and 5.2 percent growth rates in agriculture, large-scale manufacturing and services sectors, respectively.
The report states that agriculture sector grew by 2.6 percent in 2003-04 which is lower than actual growth of 4.1 percent last year and a target of 4.2 percent.
The slippage below the growth target is attributable to a pest attack on the cotton crops in Southern Punjab almost no rains in the month of March in wheat growing areas affecting the formation of wheat grain, a poor show from the minor crops and a satisfactory performance of livestock.
Major crops, accounting for 34 percent of agricultural value added, grew by 2.8 percent against a 6.9 percent rise in value addition for last year and a target of 5.5 percent for 2003-04.
Minor crops, which contribute 12 percent of value addition in agriculture, grew by 1.7 percent in 2003-04 against a growth target of 3.5 percent and a slight increase of 0.4 percent last year.
The livestock sub-sector, which accounts for almost one half of overall value addition in the agricultural sector (49 percent) has witnessed a modest growth of 2.6 percent in 2003-04 against the target of 3.0 percent and an actual achievement of 2.8 percent last year.
Wheat production is estimated at 19.558 million tones in 2003-04, as against 19.183 tones of last year, showing an increase of 1.95 percent.
Rice production is estimated at 4.648 million tones in 2003-04, as against 4.478 million tones of last year, showing an increase of 8.3 percent.
Sugarcane production has increased by 2.6 percent in 2003-04, from 52.056 million tones of last year to 53.420 million tones in 2003-04.
Cotton production has, however, decreased from 10.211 million bales in 2002-03 to 10.048 million bales in 2003-04, showing a decrease of 1.6 percent.
As regards the minor crops, the production of two major pulses, namely, masoor and mung have increased this year. Production of masoor has increased by 3.4 percent, followed by Mung (2.2 percent) during 2003-04.
The production of Mash declined by 13.8 percent. The production of onion is estimated to increase by three percent. The production of potato increased by 1.6 percent, while production of chilies decreased by 2.5 percent in 2003-04 over the last year.
Agricultural credit disbursement of Rs 73.560 billion during 2003-04, is higher by 24.8 percent, as compared to Rs 58.919 billion over last year.
The fertiliser off-take stood at 3221.918 thousand nutrient tones in 2003-04 or higher by 6.7 percent, as compared to 3019.8 thousand nutrient tones last year.
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