Economy to grow at 4.7pc by 2014

Tuesday, 21 February 2012 17:49

ISLAMABAD: Economic Growth of the country would reach 4.7 percent by fiscal year 2014 while the growth during the current year is expected at 3.8 percent, official document revealed.

"GDP growth is expected to be around 3.8 percent for FY12, with growth momentum increasing in the following years, reaching 4.7 percent GDP growth by FY14," according to projections given in Pakistan Debt Policy Statement 2011-12 published by the Ministry of Finance.

According to the document, current projections indicate that inflationary pressures from within and outside the economy will subside in the medium-term, with increase in CPI falling to 12.0 percent in FY12, and further to 9.5 percent in FY13.

The rate of increase in CPI is projected to fall to 8.0 percent by FY14, it added.

On the basis of successful implementation of tax and tax administration reforms, revenues are expected to grow by an average of 17 percent per year (in nominal terms) over the next three years.

On the other hand, expenditures are expected to be growing at a slower pace till FY14 while the quantum of increase is projected to be higher in FY14 owing to an increased outlay on development projects.

On the back of successful reforms in revenue generation, public sector enterprises, and a shift from general to targeted subsidies, the fiscal deficit is projected to decline to 3.0 percent by FY14.

Exports are expected to increase by an average 5.1 percent over FY12-FY14 while growth in imports is projected to increase to 7.5 percent during the same period, resulting in an increase in the current account deficit in the medium-term.

The projected annual growth of public debt in the next three years is nearly 7.4 percent, the document said adding the emphasis has largely been placed on domestic sources to finance the fiscal deficits in the medium term.

As far as External Debt is concerned, the outstanding stock is projected to remain flat once the IMF repayments are initiated in FY12, with a marginal decrease in stock projected for FY14.

Excluding IMF SBA, the framework envisages gross disbursement of external debt to average at approximately US$ 0.6 billion during the next three years.