GDP growth lags half behind the target

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ISLAMABAD: Gross Domestic Product (GDP) growth rate trailed almost half behind the set target, tax revenue in the first ten months amounted to Rs1156 billion, while the rate of inflation surged to 14 percent, according to the Economic Survey 2010-11 received by the Geo News.

The rate of economic growth during the current fiscal year remained at 2.4 percent as against the target of 4.5 percent, agriculture sector growth rate stood at 1.2 percent against the target of 3.8 percent, while the services sector growth stood at 4.7 percent against the target of 4.1 percent, said the report.

Manufacturing sector growth rate in the current fiscal year remained negative at minus 0.1 percent. Electricity, gas and water supply growth worsened at minus 21 percent, large industries growth stuck to 1 percent, while small industries growth stood at 7.5 percent.

The Survey disclosed that rate of inflation during July 2010 to April 2011 remained at 14 percent, while the general kitchen items prices hiked by 18.42 percent.

Survey said that the energy crisis and paucity of foreign investment hit the industrial growth. Saving rate lingered at 12.9 percent against the target at 14.5 percent, investment growth rate at 13.4 against the target of 17.9 percent, while the direct foreign investment during July-March current fiscal year plunged down by 29 percent and investment in the stock market crashed down by 33 percent.

Tax collection fell down because of the slow economic growth, however it amounted to 12.6 percent higher than the previous year. In the first ten months tax revenue amounted to Rs1156 billion as against the target of Rs1588 billion.

The budget deficit was to be restricted to 4.7 percent, while it has been estimated to remain at 5.5 percent.

The government sectors took loans of Rs342.2 in ten months, Rs472.2 were borrowed for the budget support, which included State Bank’s Rs196.3 billion.

The Survey further said the inflation rate is likely to go up to 15 percent by the end of the current fiscal year. Trade deficit declined by 2.2 percent and it amounted to $8 billion in ten months. 638 companies were listed in the stock market and volume of investment remained at Rs920 billion.