Dar eyes 5.5pc GDP growth in 2016

Source:  Dawn.com Published in Business & Economy on Thursday, March 24, 2016

ISLAMABAD: Finance Minister Ishaq Dar has stated that the country achieved 4.24 per cent GDP growth in the year 2015, highest during the last seven years.

Chairing a meeting of the monetary and fiscal policies coordination board on Wedn­e­s­day, he said the macroeconomic indicators suggest that the growth was picking up modestly. “We have targeted our gro­wth at 5.5pc for 2016.”

The meeting, led by Ishaq Dar, was attended by Com­merce Mini­ster Khu­rr­am Dastgir, Secretary Finance Waqar Masood Khan, Gov­­e­rnor State Bank of Pakistan Ashraf Mahmood Wathra, Former Governor SBP Ishrat Hussain, Pakistan Institute of Development Economics Vice Chancellor Asad Zaman and other senior officials of the finance division.

The meeting was informed that the large-scale manufa­cturing continued to remain strong, with a growth of 4.12pc year-on-year during July-January 2015-16 from 2.15pc.

Low global oil prices and subdued monetary expansion resulted in the decline of Con­sumer Price Index at 2.48pc during July-February 2015-16 as compared to 5.45pc in the same period last year. Other indicators such as food, non-food, core inflation, Sensitive Price Index, etc were also low as compared to last year.

The external sector was also stable. Current account deficit narrowed to $1.859 billion during July-February 2015-16 from $1.947bn last year on account of stable exchange rate, remarkable reserves and healthy growth of remittances. Workers’ remittances sur­ged by 6.1pc year-on-year to $12.714bn in the first eight months of 2015-16 from $11.986bn. Foreign exchange reserves, which were at the lowest level in Feb ruary 2014, rose to $20.508bn as of March 21, 2016.

The meeting was apprised that a number of sectors performed well during July-January 2015-16, such as aut­o­­­mobile which grew by 31.42pc, fertilisers 14.60pc, che­micals 11.44pc, rubber products 9.83pc, non-metallic mineral products 7.64pc, phar­­­m­a­­ceuticals 6.65pc, core and petroleum products 4.85pc, food and beverages 2.23pc and textile 0.95pc.

Machinery imports rose by 8pc during the period, which signals higher development activities. Moreover, electricity and gas supplies also incre­ased by 6pc and 4pc, respectively. Credit to private sector expan­ded by more than 100pc year-on-year during July to March 4, 2015-16. Similarly, public sector development spending also increased to Rs700bn. Federal Board of Revenue’s collection was continuously rising as it increased by 17.2pc year-on-year during July-February 2015-16.

The meeting was also informed that Foreign Direct Investment (FDI) improved by 4.8pc year-on-year during July-February 2015-16. The country was able to attract $103m in FDI in February 2016, up by around 16pc year-on-year. Total FDI to date reached $647.9m as compared to $619.6m last year.

The debt sustainability indicators also improved.

The SBP governor infor­med the meeting that a 320-basis-point reduction in policy rate has led to doubling of credit disbursement to private sector in this fiscal year.

On the occasion, the commerce minister commented on the Strategic Trade Policy Framework (STPF) 2015-18. He said that the STPF was aimed at achieving marked improvement in exports. Dar at the conclusion of the meeting added that the government was taking all steps to further build on the economic gains and would pursue the objectives of growth, employment generation and poverty alleviation. 

People Mentioned
  • Muhammad Ishaq Dar Federal Minister for Finance, Revenue, Economic Affairs and Statistics