Pakistan's economy slowed down in 2014-15 as did other world economies due to exogenous factors, says Finance Minister Muhammad Ishaq Dar on Thursday. Pakistan's Economic Survey for 2014-15 released by Finance Minister Ishaq Dar at a news conference on Friday was a mix bag of economic performance of the government. Finance Minister admitted that targets for GDP growth, exports, revenue collection, investment, fiscal deficit, Foreign Direct Investment (FDI) and credit to private sector for the current fiscal year were all missed.
However, he said that there was an improvement in the current account deficit and inflation were helped by decline in oil and commodity prices in the international market and also due to higher remittances by expatriates. GDP growth of outgoing fiscal year would remain at 4.24 per cent for the current fiscal year against the budgetary target of 5.1 per cent due to 2.5 percent growth of b Large Scale Manufacturing of 2.5 per cent during the first ten months of the current fiscal year against annual target of 6 per cent and agriculture sector's growth of 2.69 per cent against the annual target of 3.9 per cent.
He said that inflation was at 4.65 per cent during the eleven months of the current fiscal year, and is expected to close at 5 per cent against last year's figure of 8.66 per cent. Finance Minister attributed deceleration in the rate of inflation to relatively lower government borrowing from the State Bank of Pakistan (SBP) and stability in the exchange rate. The Minister expressed skepticism about limiting fiscal deficit to 5 per cent (against the target of 4.9 per cent) and for exports to achieve $25 billion mark attained last year. Export targets for the current year were $27 billion.
Finance Minister said that exports stood at $20 billion during the first nine months with a negative growth of 3 per cent. Imports have also declined by 1.61 per cent. Investment almost remained stagnant during the current fiscal year as it was 15 per cent of the GDP last fiscal year and 15.1 per cent in the current fiscal year whereas Foreign Direct Investment has declined substantially in the current fiscal year when compared to last fiscal year. The projected target for the current fiscal year for FDI was $5 billion while the country received $2.65 billion during the first ten months 2014-15 against $4.44 billion in 2013-14.
He said that the FDI inflows have been received in oil and gas, financial sector and power sector and imports of machinery and capital good have increase during the current fiscal year. Current account deficit stood at $1.36 billion during July-April of the current fiscal year as compared to $3.13 for the last fiscal year. He added that remittances during the period under review stood at $14.97 billion against $12.96 billion for the same period of last fiscal year and total remittance are expected to close $16 billion. He said that the efforts would be made to achieve revise Federal Board of Revenue (FBR) tax collection target of Rs 2605 billion for the current fiscal year. Finance Minister said that Pakistan's economy suffered a damage of $107 billion during the last fifteen years due to war against terrorism. The Minister said that the higher projection of growth would also require higher production of energy and reforms are in process.
Replying to questions, Finance Minister as usual blamed Pakistan Tahreek-e-Insaaf sit in, floods, and decline in the global; commodity prices for the decline in growth. The Minister said that the discount rate has been reduced to 7 per cent and a three tiers system has been put in place to ensure that it must remain between 5.5 to 6 per cent interest rate instead of 7 per cent and promised an investigation into the causes of low credit of Rs 162 billion in the current fiscal year against over 300 billion for the last fiscal year to the private sector.
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