Government set 4.5 percent growth target

June 06, 2010

RECORDER REPORT

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The government has targeted 4.5 percent GDP growth rate for the financial year 2010-11, with the following sectoral contributions: agriculture 3.8 percent, manufacturing 5.6 percent, and services sector 4.7 percent. The production targets of wheat and rice have been set at 25 million tons and 6.2 million tons, respectively, for 2010-11.

Agriculture sector has been projected to grow by 3.8 percent. This is to be contributed by major crops (3.7 percent), minor crops (3.0 percent), livestock (4.2 percent), fishery (2.0 percent) and forestry (2.5 percent). This growth trajectory is supported by the fact that key farm inputs, including credit to farmers, is expected to increase. The production target for sugarcane in 2010-11 has been set at 53.7 million tons for kharif season.

The measures for achieving wheat and rice production targets include: streamlining the process of storage and procurement, improvement in water availability, increase in the use of pesticides, and quality certified seeds.

The steps for livestock sector growth at of 4.2 percent has necessitated an increase in the performance of livestock sector including prudent management of milk and meat prices, easy availability of credit, expansion and modernisation of slaughter houses, improvement in the research and development funds, education of farmers through extension services, increased vaccine coverage, incentives for greater use of capital equipment in the livestock sector, facilitation through weighbridges, sheds, water, electricity, provision of high yielding fodder varieties, establishment of milk collection points and chilling centres.

For industrial sector growth of 4.9 percent during 2010-11, it is assumed that energy shortages would decline and industry would be given priority for uninterrupted supply of electricity and gas. Improved cotton availability will also support the textile sector. The services sector is expected to grow by 4.7 percent with contribution of transport, storage and communication (4.6 percent) and wholesale and retail trade (5.1 percent).

The Annual Plan 2010-11 aims to maintain a sustainable balance of payments position to ensure macroeconomic and exchange rate stability. Pakistan is a developing country with a high degree of dependence on imports of oil, essential industrial raw materials, and machinery and equipment. To meet such requirements without excessive reliance on external borrowing, Pakistan needs a competitive and dynamic export sector capable of generating robust growth in export earnings to maintain a viable balance of trade.The Strategic Trade Policy Framework 2009-12 envisages a comprehensive strategy to increase Pakistan''s market share in world trade. Current account balance would also need to be improved by attracting private transfers, especially workers'' remittances. Capital and financial account would be strengthened by diversifying sources of financing, with greater recourse to non-debt creating sources of financing.