Major targets missed; tough decisions ahead

ISLAMABAD: Making an excuse of floods, security situation and soaring oil prices at international market, Federal Minister for Finance and Economic Affairs Abdul Hafeez Shaikh Thursday admitted that the government has failed to achieve major economic targets including GDP growth’s target during the outgoing financial year 2010-2011.This he said while launching the Economic Survey of Pakistan for the year 2010-11 here on Thursday.According to the pre-budget document, the government has approved Rs 730 billion Public Sector Development Programme (PSDP) for the year 2011-12. The federal component of the PSDP is Rs 300 billion, while the provincial component is Rs 420 billion. Rs 10 billion have been approved for the Earthquake Reconstruction and Rehabilitation Authority (ERRA). As per the survey, the GDP for year 2010-11 was fixed to grow at 4.5 percent, but due to several challenges including the devastating floods that hit the economy badly, the growth rate reduced to 2.4 percent.Addressing the news conference, Dr Abdul Hafeez said the devastating floods, increase in international oil prices and security situation were the three main factors that hit the country’s economy and subsequently resulted in slowdown in growth rate during the fiscal year 2010-11. “We face challenges but this is the time when all political parties and civil society are determined to lead the country out of these crises,” the Finance Minister said, adding that “with joint efforts we would lead the country out of these crises”. Despite all these challenges, the Minister said the several sectors of economy including exports and remittances showed considerable growth during the outgoing fiscal year. Hafeez said that the agriculture sector registered growth of 1.2 percent. However, he added that due to devastating floods major crops witnessed negative growth of 4 percent.

The manufacturing sector also grew by 3 percent despite increase in oil and energy prices while the services sector witnessed positive growth of 4.1 percent. Owing to the law and order situation of the country, total investment declined from 22.5 per cent of GDP in 2006-07 to 13.4 per cent of the GDP in outgoing financial year 2010-11. Similarly, the fixed investment decreased to 11.8 per cent of GDP from 13.4 per cent last year.The minister said that the Federal Board of Revenue (FBR) set the revenue collection target at Rs 1588 billion during the current year, out of which the Board has already collected Rs 1316 billion. He said that the Board was confident that it would be able to collect the remaining Rs 272 billion by the end of June. During May 2011, the Board collected Rs 160 billion against Rs 110 billion collected during the same month of last year, showing an increase of Rs 50 billion. – Nation