Pakistan - Budget Speech 2018-19
The main achievements of our government in the area of economy;
a. Real GDP Growth. Last year, our Government achieved GDP growth of 5.4% which was the highest growth rate in last 10 years. In contrast, the average GDP growth during the period 2008-12 was a paltry 2.8% per annum. For this year our growth is projected 5.8% which is the highest in last 13 years. This places Pakistan among the fastest growing economies.
The high growth rates over the last 5 years have produced unprecedented economic expansion. Size of the economy expanded from Rs.22,385 billion in FY2013 to Rs.34,396 billion in FY2018, while per capita income increased from Rs.129,005 in 2013 to Rs.180,204. Alhamdolilah, today Pakistan’s economy is 24th largest economy in the World.
b. Agriculture. Agriculture is the mainstay of our economy. Agriculture sector has shown the highest growth in the past 18 years of 3.8%. All major cash crops including cotton, rice, and sugarcane have contributed to this growth. This is the result of prudent policies pursued by our government during the last five years. In addition a special Kisaan package was announced by Mian Nawaz Sharif in 2015-16. Under this package, cost of fertilizers and pesticides were reduced, and cheaper credit was made available, and cash support was given to rice and cotton growers.
c. Industry. Industrial production grew by 5.8% this year. This growth is the highest in a decade. It is driven by historically low interest rates and uninterrupted supply of electricity and gas after many long years of load shedding and darkness. A robust industrial sector is today generating several thousand additional jobs for our youth.
d. Services. Services sector, which includes banking, retail, transportation etc. witnessed a remarkable growth of 6.4%. You will not be surprised now if I tell you that this too is one of the highest in a decade
e. Inflation. Inflation is the biggest tax on the poor people of Pakistan. Alhamdolilah, we have been able to curtail average inflation to less than 5 percent in the past five years, compared to 12 percent between 2008-13. In the first nine months of this year, inflation was only 3.8 percent while food inflation was only 2 percent. Over our last 5 years, people have enjoyed an unprecedented period of price stability
f. Fiscal Deficit. In FY2013, fiscal deficit was 8.2% of GDP. Our government pursued a policy of financial prudence and fiscal consolidation. During the current year, fiscal deficit will be contained below 5.5% of GDP. Public money is a trust and we will continue to spend it prudently
g. FBR Revenues. In FY2013, FBR tax collection was Rs.1,946 billion. For the current fiscal year, FBR revenue is projected to increase to Rs.3,935 billion which is two times increase in 5 years. Tax to GDP ratio which was 10.1% in 2013 will increase to 13.2% this year. Such phenomenal increase in tax collection in 5 years is not a small achievement. I want to thank taxpayers of Pakistan for this achievement.
h. Policy Rate of State Bank of Pakistan. Policy rate came down from 9.5% in June 2013 to 5.75% in 2017, which was lowest in many decades. Similarly, mark up rates of Export Refinance Facility was reduced from 9.5% in 2013 to 3% in June 2016. Mark up rate on Long Term Finance Facility was also brought down from 11.4 % to 5-6%. Unprecedented low interest rates have allowed businesses and industry to grow and create jobs.
i. Agriculture Credit: Five years ago, credit given to agriculturists was Rs.336 billion. At the end of February 2018, it stood at Rs.570 billion and it is expected to increase to Rs.800 billion by June 2018. In addition, interest rate of agriculture credit was also reduced significantly
j. Credit to Private Sector: Credit to private sector has grown by 383 percent, from Rs.93 billion in 2013 to Rs.441 billion by April 2018.
k. Exports. Exports have been a challenging area of the economy due to both internal and external factors. As a result of concerted efforts, export package of Rs.180 billion as well as exchange rate adjustments exports have increased by 13% increase in the first nine months of this year and 24% in March on shipment basis. We expect this momentum to continue.