Highlights of Economic Survey, 2018-19

ISLAMABAD:The Economic Survey of Pakistan 2018-19 was launched here on Monday by Advisor to Prime Minister on Finance Abdul Hafeez Shaikh.

Following are the highlights of the Survey

- External sector has shown improvement after dismal performance in FY2018.

-     Policy intervention has reduced current account by 27 percent to $11.56 billion during July-April FY2019 compared to expansion of 70 percent to $15.9 billion of the corresponding period last year.

-     Imports have been restricted by 5 percent to $ 44 billion compared to $46 billion last year.

-     Trade deficit reduced by 7.4 percent to $ 23.9 billion against $25.8 billion last year.

- Remittances improved by 8.45 percent to $ 17.8 billion against 16.4 billion last year

-     GDP growth in FY 2018 was 3.3 percent, on the back of Agriculture at 0.85 percent, Industry1.4 percent and Services 4.7 percent.

-     The major factor in limiting the growth of Agriculture was water shortage both for Rabi and Khariff crops which badly impacted production of major crops such as Cotton, Rice, Sugar, which remained behind their target productions.

- The cotton crop registered a decline of 17.4 percent to 9.86 million bales

- Rice production remained short by 3.3 percent to 7.2 million ton

- Sugar production stood at 67.2 million ton and witnessed a decline 19.4 percent

- Wheat crop showed some nominal growth of 0.5 percent to 25.19 million ton

- Maize crop showed good improvement of 6.9 percent to 6.3 million ton.

-     Industrial sector showed moderate growth of 1.4 percent due to decline of Large Scale Manufacturing Sector (LSM) by 2.06 percent due to reduced aggregate demand.

-Mining and construction sector  growth declined by 1.9  and 7.6  percent, respectively.

-     Services sector was affected by the decline in Commodity Producing Sector and registered a less than expected growth at 4.7 percent.

-     General government services and other private services contributed to services sector by surpassing the target and registered a growth of 8 percent and 7 percent, respectively.

-     Fiscal deficit despite increased interest payment was managed at 5.0 percent of GDP during the first nine months of CFY2019.

-     The FBR collections remains lower due to court stay on mobile phones, reduction in personal income tax rates and reduced imports.

-     Government has separated the tax policy function of FBR from tax administration

-     Creation of Specialized Tax Unit for foreign assets.

-     Tax broadening measures.

-     Extensive use of information technology for data mining, detection of under

reporting, spotting tax evaders and get more people into tax net.

-     These efforts have helped in expansion of tax filers to more than1.87 million.

-     During July-May, FY2019 inflation increased to 7.2 percent due to reversal in global fuel prices, whose impact has been translated on domestic prices as well exchange rate adjustments. The Food inflation during this period rema ins low to 4.23 percent.

-     The SBP has adopted contractionary monetary policy stance by raising discount rate to 12.25 percent to anchor inflationary pressures and to stabilize the macroeconomic situation.

-     The flows of credit to private sector has seen expansion of Rs 581 billion during July - 26 April 2019 showing year on year growth of 15 percent over last year.

-The agriculture credit disbursement increased by 21 percent to Rs.805 billion during July-March FY 2019 over last year.

-     The actual performance of economy next year will be seen in due course of time in view of various initiatives in the field of housing, construction, SME, information technology and tourism as well as strong expansion in credit to private sector and uninterrupted supply of gas and power at competitive rates.

-     The energy sector has also shown improved performance during this year.

-The installed capacity improved by 2.5 percent to 34,282 MW compared to last year  33,433 MW, while generation increased by 2.1 percent  to 87,324 GWh from 85,552 GWh.

-     The government is targeting to create 10 million jobs in five years. The private sector will play a key role in creation of jobs supported by the government. The Key areas are

- Naya Pakistan Housing Program by building 10 million houses

-     10 billion Tsunami-Government country wide tree plantation Program

-     National Financial inclusion Strategy to promote SMEs and digitization of Financial services

-     Investment in tourism will help in job creation through development of neglected areas

-     For the youth the government has launched Kamyab Jawan Program. This program will provide low cost loans to the youth for establishing small businesses enterprises.