Nationwide Updates

► Exports suffering from structural issues

The continued domestic demand on the back of strong economic growth and extraordinary rise in the international oil and food prices has deteriorated the trade deficit of goods. Pakistan's export performance was dismal in 2006-07 as it witnessed abrupt and sharp deceleration to less than 4 percent. According to economic Survey of Pakistan, Pakistan's export performance has been impressive in recent years (2002-03 to 2005-06) with exports registering an average growth of 16 percent per annum on the back of strong macroeconomic policies pursued at home and international trading environment remaining hospitable.  (Daily Times)

► Economic Survey 2007-08: Overview of the economy  

Fiscal year 2007-08 has been a difficult year for Pakistan's economy. Several political and economic events, both on domestic and external front, occurred unexpectedly. These events include: disturbed political conditions; an unstable law and order situation; supply shocks; soaring oil, food and other commodity prices; softening of external demand; and turmoil in the international financial market. All these events have adversely affected the key macroeconomic fundamentals of Pakistan during the fiscal year 2007-08. The most important aspect the non- responsive stance on account of political expediency in addressing domestic.  (Business Recorder)

► Economic Survey 2007-08: A spoiled broth  

The Economic Survey for the year 2007-08 has been released, a requirement prior to the announcement of the budget for the forthcoming fiscal year. It is an assessment of the economy by the Economic Advisor's Wing, Finance Division, and, because of its authorship is considered to have an inbuilt bias in favour of the economic performance of a sitting government. The ability to present a bias in a plausible manner is limited this year as finance ministry has been run by four ministers. However, in the Survey for 2007-08 the Economic Advisor's Wing has added a new category.  (Business Recorder)

► Fiscal deficit and the law 

BUDGET-making is a taxing affair. All eyes are once again focused on Chairman Federal Board of Revenue Yusuf Abdullah, and on how he will waltz his way out of what is likely to be a totally imbalanced budget. Ishaq Dar, who was holding the portfolio of minister of finance and revenue when the budgetary process began, is at present out of the picture and will therefore not have to face the music, although the budget under preparation is not free of his imprints. There is a reported Rs40bn revenue deficit and targeted four per cent fiscal deficit this year, which according to erstwhile minister.  (Dawn)

► Stock market and CGT factor

BY extending the Capital Gains Tax (CGT) exemption on share business, the government has conceded a major demand of the stock market. The popular belief was that strapped for cash, the taxmen would prod the government to end the exemption from financial year 2008-09. Capital gains tax on short-term, speculative business, following the Indian model, was thought to be on the cards. Companies that make heavy investment in shares, had already started rewriting their portfolio before the announcement of the budget in order to stave off the expected blow.  (Dawn)

► Economy presents bleak picture 

The irresponsible macro-economic management in a period of political instability and challenging external factors moderated the pace of economic growth in the country from targeted 7.2 to 5.8 per cent. Most macro-economic indicators degenerated over the year under review, the Economic Survey 2007-08 revealed. Inflation increased and internal and external deficits widened. The performance of commodity producing sectors, particularly agriculture, was dismal. The manufacturing sector posted much less expansion than expected. This means that too much money was chasing fewer goods that were mostly imported.  (Dawn)

► Inflation will determine growth 

According to a Business Recorder report, the Planning Commission has projected growth at 6.5 percent for the next year, while the two multilateral agencies, ie, International Monetary Fund and the World Bank have assessed it at around 3.5 percent. The National Economic Council chaired by the Prime Minister, on the other hand, has estimated 5.8 percent GDP growth for financial year 2008-09. According to an earlier report in this newspaper, the Planning Commission projection at the NEC, was slashed due to the intervention by the State Bank Governor, Dr Shamshad Akhtar, on the ground that the Planning Commission assessment was unrealistic. (Business Recorder)

► Government failed to control inflation 

The government has missed the inflation target for 2007-08 of 6.5 percent and at the end of the year, average inflation rate will over 11 percent. During the first ten months of the current fiscal year 2007-08, the overall CPI-base inflation averaged at 10.30 percent which is much more higher as compared to the last year fiscal year where inflation stood at 7.9 percent, says the Economic Survey of Pakistan 2007-08 released in Islamabad Tuesday. This year's inflation started with 6.4 percent in July 2007 but continued to accelerate, reaching a peak of 17.2 percent in April 2008. Food inflation was close to 8.5 percent at the beginning . (Daily Times)

► Sharp fiscal adjustment needed to contain inflation

The Economic Advisor to the Government Dr Ashfaq Hasan Khan has called for making sharp fiscal adjustment to reduce large external account imbalances, restore the confidence of global investors, ease financing constraints, support growth and contain inflation. Presenting his 10th consecutive annual survey of the economy said that sooner Pakistan improves its fiscal position by making sharp fiscal adjustments, the lesser the price it is likely to pay for its fiscal indiscipline. High global prices of food, fuel and other commodities driven by a weaker Pakistani rupee, high import prices and gradual removal of fuel, food and power subsidies alongwith monetary overhang.  (Business Recorder)

► FDI falls by 32.2 percent during 10 months  

Pakistan's foreign direct investment (FDI) has declined by 32.2 percent during the first 10 months of the current fiscal year over the corresponding of the last year. Total foreign private investment has been recorded at 3580.5 million dollar (FDI $3481.6 million and portfolio $98.9 million). The major contribution to FDI was made by the USA, UK, UAE and Switzerland and Netherlands in financial, business, telecommunications, oil and gas, trade power, petroleum refining and construction sectors.  (Business Recorder)

► Agriculture performed poorly

Agriculture sector performed poorly in 2007-08, growing at 1.5 percent against the target of 4.8 percent and it was due to poor performance of major crops and forestry, registering negative growth of 3.0 percent and 8.5 percent, respectively. The Pakistan Economic Survey 2007-08 issued here Tuesday revealed that livestock, minor crops and fishing have been the saving grace as these sectors have performed reasonably well to compensate the performance of major crops and forestry to arrive at 1.5 percent growth in agriculture during 2007-08.  (Daily Times)