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We won't need to go to the IMF till 2019: Dar



  • FinMin launches Pakistan Economic Survey 2016-17; Highest
  • growth of 5.28 pc in a decade; Size of economy is $300 billion
  • Likely to contain inflation much below annual target of 6.00pc;
  • War on terror has cost the country 123.13 billion dollars: Ishaq


ISLAMABAD: Finance Minister Ishaq Dar announced that Pakistan's Gross Domestic Product (GDP) grew 5.28% in fiscal year 2016-17 (FY17), against a target of 5.7%, adding that the government had managed to reduce the fiscal deficit to 4.2%.
"This year, the deficit would amount to 4.2%," said Dar as he formally launched the Economic Survey 2016-17 on Thursday.
Fiscal deficit stood at 8.2% in 2012-13. However, what Dar did not mention was the amount of circular debt that was wiped off when the ruling Pakistan Muslim League-Nawaz (PML-N) came into power. The amount has now gone up to over Rs350 billion in the last four years.
"We won't need to go to the IMF till 2019. Our home-grown industries will be able to help us."
Pakistan will also be part of the G20, said Dar, adding that the size of the country's economy would surpass that of Canada, Italy and South Korea by 2050.
The finance minister also announced a package of Rs100 billion for the rehabilitation of internally displaced persons (IDPs) and reconstruction of infrastructure in the northern areas. Dar said the amount would be part of the budget measures to be announced on Friday.
"This year's growth rate is the highest in 10 years," the finance minister added. "A 3.4% increase has been recorded in electricity, gas supply in the existing fiscal year."
Claiming that the country's economy has surpassed $300 billion, the finance minister said growth rate for next fiscal year has been set over 6%. "GDP growth in Pakistan is being acknowledged at the international level," he upheld.
Referring to public debt, a source of constant criticism for the government, Dar said the ratio had reduced from the level in 2012-13.
"Public debt was at 53.1% of GDP in 2008. It went up to 60.2% of GDP and it is now at 59.3% of GDP."
Agencies add: The agriculture sector growth remains impressive this year. The production of important crops like wheat, rice, sugar, maize remained encouraging and cotton production also remained higher than last year which helped in agriculture growth. This was on account of supportive agriculture policies, healthy agriculture credit disbursement and other supportive measures provided to the agriculture sector. The PM Kissan Package has started yielding the dividend in agriculture sector.
It was also informed that the government has been able to anchor the inflation at 4.1% during first ten month of current year and is likely to contain it much below the annual target of 6% despite reversal in global commodities and oil prices. The government on the social sector also remained vigilant to reach the poor and destitute class by providing cash grant under BISP. The cash grant increased to Rs.115 billion during current fiscal year.
The per capita income has increased over last year by 7.4% to US dollar 1628. The LSM sector recorded impressive growth of 10.46% in March 2017 largely benefitted from accommodative monetary and fiscal policies, improvement in energy supplies, better availability of raw material, rising domestic demand, particularly for cement and steel owing to increase in development spending in power and infrastructure projects.
The performance of the services sector remained very encouraging as it posted a growth of 5.98% on the back of better output in agriculture and industrial sector. The finance and insurance growth remained above 10% on the back of improvement in asset base reaching all time high to Rs.15.8 trillion and capital adequacy ratio increased to 16.2%.
The Pakistan's public debt dynamics witnessed various positive developments during first nine months of current year as government continued to adhere to the targets set forth in Medium Term Debt Management Strategy (MTDS) to ensure public debt sustainability and weighted average interest rate on the domestic debt portfolio has been further reduced while cost of external debt contracted by the government which is not only economical but is also dominated by long term funding.
The Minister while addressing the press conference stated after successful operation of Zarb-e-Azb, a country-wide operation Raddul Fasaad has been launched for eliminating further any extremism. In this backdrop, success in counter-terrorism has played a critical role in creating conducive economic environment whose results have now started appearing in terms of growth across different segments of the economy.
The capital market has reached the historical height above 52000 index. In terms of market capitalisation it has reached to Rs. 10.4 trillion. The reserves have been strengthened enough to cover more than 3 months of imports despite the government paid off loans obtained by the previous governments.
The Minister stated that we are not complacent of this economic turnaround but we are looking towards a higher inclusive growth trajectory above 6% to absorb the growing labour force  and are determined to provide decent and respectable standard of living to the people. He said the industrial sector contributed twenty one percent, agriculture twenty percent and services sixty percent to the GDP.
Giving a breakdown, Ishaq Dar said that agriculture growth remained 3.46 percent, services 5.98 and industries 5.02 percent. About the industrial growth, Ishaq Dar said that the large scale manufacturing sector is on a positive trajectory while the construction industries witnessed a growth of nine point zero five percent during the outgoing year. About the agriculture credit, he was confident that it will achieve the target of seven hundred billion dollars this year.
Ishaq Dar said inflation according to Consumer Price Index was 8.69 percent in 2013-14 and it is is expected to close at 4.09 percent at the end of the current financial year as a result of measures taken by the Government.
The Finance Minister said exports is the area of concern and the Government is focusing on it.  He said exports are 17.91 billion dollars in the first ten months of the current fiscal year. He said the exports are likely to close at 21.76 billion dollars.  
He said package given to exports has been enforced and this will continue during the next financial year.  
He pointed out that imports of the country have increased to 37.40 billion dollars during the first ten months of current fiscal year as compared to 33.44 billion dollars during the same period last year.  These are expected to close at 45.48 billion dollars at the end of the year.  He said import of plants and machinery have been increased by forty percent which good for the growing economy.
Finance Minister said current accounts deficit is expected to close at 8.3 percent this financial year.
He said remittances are expected to close at 19.5 percent this year showing a decline of 2.6 percent. He said Foreign Direct Investment has increased to 1.73 billion dollars during the first ten months of this year as compared to 807 million dollars during this period last year.  
He said it is expected to reach 2.58 billion dollars.  He said at present foreign exchange reserves stand at just under twenty billion dollars.  He said exchange rate as of 22nd of this month was 104.87 which is satisfactory.
Upbeat about the performance of stocks, the Finance Minister said the market capitalization has doubled over the last four years. He said the decision of merging different stocks into Pakistan Stock Market helped earn the status of best performing market in Asia and the fifth largest in the world.
He was confident to close the financial year at the fiscal deficit of four point two percent which was eight point eight percent when the present government assumed power. About the net public debt, the Finance Minister said it stands at 18892 billion rupees which is 59.3 percent of the GDP.
Ishaq Dar said that FBR is expected to achieve the revised collection target of 3521 billion rupees.
About the war on terror, the Finance Minister said that it has cost the country 123.13 billion dollars. He said the country is annually spending ninety to one hundred billion rupees in the war on terror. 
He said that one hundred billion rupees will be set aside for the next fiscal year for the rehabilitation and reconstruction of tribal areas. The amount will also be used for raising new wings of civil armed forces.

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