GDP growth rate falls to 3.29pc in FY19

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GDP growth rate falls to 3.29pc in FY19
GDP growth rate falls to 3.29pc in FY19

The economy grew at an average rate of 3.29 per cent in fiscal year 2018-19 against an ambitious target of 6.2pc set in last year’s budget, the Pakistan Economic Survey revealed on Monday.

Sector-wise growth rates:

  • Agriculture: 0.85 per cent (against target of 3.8pc)
  • Industry: 1.4pc (against target of 7.6pc)
  • Services 4.7pc (against target of 6.5pc)

Revenue collection

Total revenue at Rs3,583.7bn (9.3pc of GDP) showed almost 0pc growth from July-March 2019, while growth in total expenditures was 8.7pc. The fiscal deficit was recorded at 5pc of the GDP compared to 4.3pc in the corresponding period last fiscal.

“Decelerated performance of total revenues primarily was due to marginal growth of 1.8pc in tax revenues and negative growth of 16.7pc in non-tax revenues,” the PES explained.

The Federal Board of Revenue’s tax receipts from July-April 2019 remained at Rs2,976bn against Rs2,922.5bn in the corresponding period last year, registered growth of 1.8pc.

“Actual tax collection during [the] first 10 months of the CFY remained at 67.7pc of revised target of Rs 4,398bn,” the document said.

Provincial revenue collection rose by 1.5pc from July-March 2019.

Expenditures

The government’s total expenditure increased by 8.7pc from July-March 2019 to Rs5,506.2bn (14.3pc of GDP) against last year’s spending of Rs5,063.3bn (14.6pc of GDP).

Current expenditure posted growth of 17.7pc to Rs4,798.4bn (12.4pc of GDP).

The federal and provincial governments’ current expenditures grew by 19.9pc and 13.7pc respectively during the period under review.

Development expenditure decreased to Rs655.9bn this fiscal compared to last year’s expenditure of Rs993.3bn, exhibiting 34pc negative growth compared to 23.6pc positive growth recorded last year.

The Public Sector Development Programme (PSDP) share in total development expenditure stood at 88pc or Rs578.5bn in the first nine months of the fiscal year. The same period last year saw Rs931.4bn expenditure.

This year’s PSDP expenditure saw a 37.9pc decline, while last year witnessed 24.7pc growth in PSDP spending.

The federal and provincial PSDP decreased by 14.5pc and 52.2pc respectively during July-March 2019 compared to the same period last year.

Deficits

According to the PES, exports fell by 1.9pc despite exchange rate depreciation, while imports declined by 4.9pc.

“This helped in reducing the trade deficit by 7.3pc during July-April FY18-19, while it had shown an expansion of 24.3pc during the corresponding period last year,” the document stated.

The current account deficit contracted by 27pc from July-April 2019, while it had expanded by 70pc in the corresponding period last fiscal year.

“Workers’ remittances played a major role in containing the current account deficit to 4.03pc of GDP,” the report said.

Details to follow.

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