$10.4 billion current account deficit projected

The government has projected a $10.4 billion current account deficit for the next fiscal year (2017-18) largely due to a $26.9 billion trade deficit. Sources said the National Economic Council (NEC) meeting presided over by Prime Minister Nawaz Sharif has approved a macroeconomic outlook for the next fiscal year. The fast-growing current account deficit appears to be a great challenge as analysts say that this could trigger destabilisation.
The NEC was informed about the declining trend in exports with emphasis on the need of efforts to diversify exports and look for new markets. Trade deficit is projected to be at $26.9 billion for the next fiscal year with exports projected to grow by 6.3 percent while imports are projected to increase by 9.5 percent. The government has projected net factor income from abroad at Rs 1,985 billion for the next fiscal year and external resources inflows at Rs 951 billion.
As a percentage of the GDP, total investment is projected at 17.2 per cent, fixed investment at 15.6 per cent, public (including general investment) at 4.5 per cent of the GDP and private investment at 11.2 percent. The government has projected a 6 per cent growth for the next fiscal year on the basis of growth of 5.4 percent in commodity production sector. The growth of 3.5 per cent is estimated in the agriculture sector on the basis of 2 percent growth in important crops, 3.2 percent in other crops, 6.5 percent in cotton ginned, 3.8 percent in livestock, 1.7 percent in fishery and 10 percent in forestry.
The growth of 7.3 percent is projected in industry with 3.5 percent in mining and quarrying while in manufacturing sector a growth of 6.4 percent is projected with large scale manufacturing, 6.3 percent, small and household, 8.2 percent, slaughtering, 3.7 percent, 12.1 percent growth in construction and 12.5 percent in electricity generation and gas distribution.
The services sector's growth is estimated at 6.4 percent for the next fiscal year based on 5.6 percent growth in transport, storage and communication, 7.2 percent in wholesale and retail trade, 9.5 percent in finance and insurance, 3.9 percent in housing services, 7 percent in general government services and 6.7 percent in other private services.