Pakistan is eyeing 5.7 percent economic growth in the next fiscal year, after a robust performance in the outgoing year ending June 30, helped by lower global oil prices, investment in China-sponsored investment and improvement in energy supplies.
The South Asia’s second-largest economy is expected to grow 4.7 percent this year despite a sluggish cotton output which is the backbone of country’s exports. Textile exports make up more than 50 percent of the country’s total exports. The International Monetary Fund has forecast 4.5 growth for the current fiscal year.
The National Economic Council, Pakistan’s highest economic -decision making body, held its meeting in Islamabad this week to set targets for the next fiscal year, beginning July 1. Prime Minister Nawaz Sharif, who is London for heart treatment, chaired the meeting through tele-conference.
The meeting set 5.7 percent gross domestic product (GDP) target for the next year. Agriculture sector is expected to grow 3.5 percent; manufacturing sector, 7.7 percent and Services sector, 5.7 percent.
Pakistan is hoping to get a big boost from the investment in China Pakistan Economic Corridor that envisages $46 billion investment in infrastructure projects that include roads, railway and power plants. The project signed last year will give China access to the Arabian Sea for its exports through the deep sea port at Gwadar.
In its recent review of Pakistan’s economy under a three-year fund facility, the IMF praised Pakistan’s robust growth, helped by investment in CPEC as well lower global oil prices. Pakistan meets nearly 80 percent of its oil needs through import, and petroleum is the largest item on the import bill.
“The authorities’ reform efforts continue to strengthen macroeconomic stability, public finances, foreign exchange reserve buffers, and expanded protection of the most vulnerable under the Benazir Income Support Program,” the IMF said in a statement early this month at the completion of 10th review.
Pakistan secured $6.6 billion loan from the IMF in 2013 under its Extended Fund Facility (EFF), and a quarterly review is held before the release of next installment of the loan.