By Zulqarnain Haider
Islamabad: The Imran Khan’s embattled government is targeting an “ambitious” average economic growth rate of 5.8 per cent over the next five years.
Although in the first five months the PTI government performed bad on the economic front almost every sector is showing declining trend, thanks to some blue-eyed of PM Khan like Finance Minister Asad Umar and Minister for Planning, Development and Reforms Khusro Bakhtyar.
There has been calls from a ‘certain quarter’ to rid off both these incompetent minister to fix the economy. Let’s see when Khan gives heed to this call.
In its 12th five-year plan currently being finalised by the Planning Commission it is aimed t achieving 5.8pc GDP growth on average during the plan period 2018-23,” the meeting was told and explained that
this growth had been projected on the basis of 3.6pc growth in agriculture, 6.1pc in industry and 6.8pc in services sector on average during the plan period.
The draft five-year plan was approved in principle by the National Economic Council in April last year under then prime minister Shahid Khaqan Abbasi with the condition that it should be vetted by the next government before its formal launch. The draft targeted GDP to grow by 6.2pc in 2018-19 with 3.8pc contribution from agriculture, 7.6pc from industry and 6.5pc from services.
According to a senior government official the growth rate target for the current financial year had already been revised downwards significantly from 6.2pc to 4.2pc owing to a series of factors. These included a policy of fiscal consolidation adopted by the current government because of higher than anticipated fiscal deficit on the conclusion of last fiscal year, downturn in agriculture and the expected programme of the International Monetary Fund (IMF).
The agriculture growth was already revised to 3.6pc on the back of a higher 3.8pc growth achieved last year but this has now been scaled down to 2.4pc. The major crops were now projected to show a decline of 0.8pc because of overall water shortage and shift in area under cultivation from sugarcane to other crops.
The official said the government had to revise almost all the targets because of ensuing higher fiscal deficit on the lack of decision making during a prolonged political transition. The path of consolidation meant the aggregate demand will reduce significantly. The farmers have been struggling over the past many months, they faced water shortages and could not secure reasonable prices for sugarcane and for wheat as well and faced higher input prices — fertiliser, energy to name a few.
This is expected to shift the area under cultivation from sugarcane to cotton and to minor crops to some extent. The bumper wheat crops of the past two years also had an impact on the overall return offered by the sector to the farmers and associated sectors.
Since the manufacturing and transport is highly dependent on agriculture this would also affect industry and the services sector.
The government now expects that an enabling environment for investment would be created with better energy supplies and competitiveness would improve because of better energy prices offered by the new government in one to two years. During this period, SMEs were expected to perform well and coupled with planned structural reforms they may help revive the foreign direct investment (FDI) supported by investors from friendly countries like China, Saudi Arabia, Malaysia, the UAE and Qatar.