Financial Risk Manager

Ways of Financial and Risk Management

Economic Review
Thursday, June 11, 2009

Despite of strong commitments and promises by the government, Pakistan almost missed all its major targets for Fiscal year 2008- 09.Local economy grew by just 2.0 percent as against target of 4.5 percent and last year’s 4.1 percent owing to lack luster performance from industry and services.
Agriculture sector showed signs of resilience and grew by 4.7 percent, surpassing target of 3.5 percent. Manufacturing sector contacted by 3.3 percent while Large Scale Manufacturing contracted more severely by 7.7 percent as compare to targeted 5.5 percent. Main reasons for the serious contraction in Manufacturing were power shortages, weak and depreciating rupee against USD, poor law and order, global recession and high inflation which restrained consumers from making expenditures in durable goods.
Services grew by just 3.6 percent against targeted 6.1 percent. Finance and insurance sector struggled and showed a negative growth of 1.2 percent.
Investment fell sharply in 2008-09 and fell to 19.7 percent of GDP as compare to last year’s 22.5 -Inflation stood at 22.3 percent during July-April 2008-09 as compare to last year’s 10.3 percent. Food inflation remained much high at 26.6 percent along with non food inflation which stayed at 19.0 percent. Keeping in mind the current scenario the full year inflation is expected to be around 21.0percent.
Although FBR managed to collect Rs 898.6 billion in Jul-April 2008-09 but the tax collection target of 10 percent of GDP would likely to be missed easily.
Foreign investments declined by 42.7 percent to $2.2 billion as compare to last year’s $3.9 billion. the major decline was seen in portfolio investment where almost investments of almost a billion dollar got drained from the system.

Source: NBP Treasury

Labels: Economy and Business, Pakistan Economy