Agriculture sector registers negative growth rate for first time in 25 years
Finance Minister Ishaq Dar will launch the Economic Survey for the financial year 2015-16 on Thursday that presents a lackluster performance of the economy, especially the agriculture sector that nosedived to register a negative growth rate for the first time in 25 years.
An official source told Pakistan Today that the Economic Survey will offer no silver lining and the finance minister will face a tough time explaining the poor performance of the agriculture sector and above average output of the manufacturing sector. This is the third consecutive year when the government failed to achieve its major economic targets.
According to the executive summary of Economic Survey, the target of 5.5 percent GDP growth was not attained mainly due to the negative 0.19 per cent growth of the agriculture. The GDP growth remained 4.7 per cent FY16. It is also a reason the government has scaled the GDP growth target to 5.7 per cent from earlier projected target of 6.2 per cent for FY17.
The decline is attributed to failure of main cash crops cotton, rice, maize and wheat. More than four million bales of cotton were wiped out due to pest attack. The cotton crop declined from over 14 million bales last financial year to less than 10 million bales this year.
Failure in agriculture sector was also reflected in the exports which declined by nine per cent during the July-April period of current financial year to $ 18.2 billion as compared to $ 20 billion exports same period last year. It is important to mention that the capacity issues in the manufacturing sector failed to properly utilize tariff concessions from the GSP Plus scheme.
Like the previous year, the government this year again failed to deliver on its investment and saving targets with wide margins. The Investment of GDP ratio slipped to 15.2 per cent against the target of 17.7 per cent. The saving remained static at 14.5 per cent as compared to target of 16.8 per cent of GDP for FY16.
The fixed investment decreased to 13.6 per cent of GDP as compared to the target of 16.1 per cent. However the public investment increased 3.9 per cent of GDP as compared to the target of 4 per cent. The private sector investment remained at 9.8 per cent as against the target of 12.2 per cent.
Overall the industrial sector showed an increase of 6.8 per cent. The mining and quarrying sectors increased by 6.8 per cent. However production of crude oil decreased by 8.2 per cent. The large scale manufacturing sector increased by 4.7 per cent during July-March FY16.
The production of cement increased by 10.4 per cent, fertilizer 16.3 per cent, automobiles 29.7 per cent, and cooking oil 8.4 per cent. While construction activity registered a growth of 13.1 per cent. However production of pig iron, electric motors, tractors, chip board declined.
Electricity and gas sector showed a growth of 12.18 percent. The improvement is due to higher electricity generation due to falling furnace oil prices and availability of gas.
About the services sector, the survey says it registered a growth of 5.71 percent. Wholesale and retail trade sector increased by 4.57 percent, transport, storage and communication sector registered growth of 4.06 percent. Finance and insurance sector increased by 7.84 percent. The general government services grew by 11.13 percent as compared to previous year growth of 4.82 percent.