Eight percent GDP growth in 2007-08 envisaged

The Planning Commission has envisaged 7.5-8 percent GDP growth in 2007-08 due to strong pick-up in domestic and foreign direct investments and excellent performance of agriculture, manufacturing and services sectors, official sources told Business Recorder.
The Planning Commission (PC), in its mid-year review (July-December 2006) of Medium Term Development Framework (MTDF) to be discussed at a meeting of National Economic Council (NEC) chaired by the Prime Minister Shaukat Aziz on March 27, is confident of achieving 7 percent GDP growth target set for the current fiscal year.
However, the PC has expressed its dissatisfaction over the growth rate of services sector but at the same time termed the information insufficient to assess the overall performance of the sector.
"At present, among the various services sub-sectors, growth of wholesale and retail trade has been revised to 7.2 percent as compared to annual plan target of 8.8 percent," the sources added.
In the annual plan, the GDP growth for 2006-07 was projected at 7 percent, contributed by sectoral growth rate of 4.5 percent in agriculture and 13 percent in Large Scale Manufacturing (LSM) while the services sector growth was projected at 7.1 percent. It is interesting to note that the PC has also projected 2 percent decline in LSM growth to 11 percent against the target of 13 percent.
To attain the projected GDP growth, an investment of Rs 1895.4 billion (21 percent of GDP) was envisaged. About 72 percent of fixed investment was estimated to come from the private sector and remaining 28 percent from the public sector. The national savings were estimated at 17.2 percent of the GDP.
The PC, which in its export strategy papers had projected 6.5 percent GDP growth due to declining exports, is now saying the country would achieve 7 percent GDP growth, which is contrary to its earlier claim.
GDP growth for 2006-07 is estimated to be 7 percent on the basis of preliminary assessment of agriculture growth, LSM data for July-September 2006 and import data for July-January 2006-07.
The sources said the Ministry of Food, Agriculture and Livestock (Minfal) has projected 5 percent growth in agriculture due to bumper wheat crop and accelerated livestock production against the target of 4.5 percent.
They said, the growth of eight manufacturing sector items declined, high-speed diesel by 15.6 percent; furnace oil 12.7; phosphatic fertiliser 7.8; electric meters 19.9; electric fans 9.1; electric bulbs 10.4; TV sets 31.3 and bicycles 1.4 percent.
The PC has also termed the current account deficit not in line with the current year's projections saying that it is likely to surpass the annual plan target of $6.3 billion as it was $4.4 billion during July-December 2006.