Pakistan’s per capita income rises slightly to $1,561

Published: May 24, 2016
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Pakistan misses critical savings and investment targets in 2015-16. PHOTO: INTERNATIONAL DIASPORA

Pakistan misses critical savings and investment targets in 2015-16. PHOTO: INTERNATIONAL DIASPORA

Pakistan misses critical savings and investment targets in 2015-16. PHOTO: INTERNATIONAL DIASPORA PHOTO: FILE

ISLAMABAD: Pakistan’s per capita income has marginally grown to $1,561 but targets to increase investment and savings – the two most critical economic indicators after national output goal – have been missed again during the outgoing fiscal year.

The government’s inability to increase investment as percentage of total size of national economy is probably the biggest failure after it failed to achieve outgoing fiscal year’s gross domestic product (GDP) target of 5.5%.

Per capita income: A Pakistani now makes $1,513 a year

Missing of the targets on savings, investment and GDP growth also puts a question mark over the acclaimed structural reforms introduced under the $6.2 billion International Monetary Fund bailout package.

Pakistan has one of the lowest investment and savings rates in the region and the world, obstructing progress towards a sustainable and inclusive economic growth path.

Slow progress on the China-Pakistan Economic Corridor due to lack of political vision and usual bureaucratic inefficiency also pulled back investments.

Sources said in dollar terms the per capita income has grown by only 2.9% to $1,561 – up $44 in the outgoing fiscal year 2015-16. Despite a marginal increase in per capita income, the country continues to be in the league of low middle-income countries. It needs to enhance per capita income to $4,000 to be labelled a middle-income country.

Pakistan faces Rs3.3 trillion revenue black hole, says IMF

In rupee terms, there was a 5.8% growth in per capita income that increased to Rs162,568.

DESIGN: NABEEL AHMED 

To arrive at the per capita income figure, the Pakistan Bureau of Statistics – the government’s statistical arm – estimated about 2% growth in the country’s population that reached 193.56 million this year. It then divided the total national income with the number of people and arrived at per capita income of $1,561.

In absolute terms, the PBS has estimated addition of about five million people in a single year.

Like the previous year, in the current fiscal year too the federal government has again failed to deliver on the two most critical economic indicators. It missed the targets of investment and savings with wide margins.

The investment-to-GDP ratio slipped to 15.2% against the target of 17.7%, said the sources. The ratio was lower than last year’s revised rate of 15.5%. Savings remained almost stagnant at 14.5% of GDP, shy of the target of 16.8%.

Missed goals

The government has already missed the key economic growth target despite allegedly cooking the figures. Against the target of 5.5%, the economy expanded 4.7%.

Finance Minister Ishaq Dar will again unveil the tale of missed targets on June 2 while launching the Economic Survey of Pakistan for 2015-16.

The fixed investment also decreased to 13.6% of GDP against the target of 16.1%. It was 0.3% down from the last year’s level. The public investment slightly increased to 3.9% of GDP but below the target of 4%.

Pakistan’s revenue collection surpasses target

The target of private investment was also missed as it stood at 9.8% of GDP against the target of 12.2%. It was also lower than last year when private investment had been estimated at 10.2%.

Within the private investment, the investment in electricity and gas generation fell massively, indicating that the country may not be able to overcome energy shortages, which are hampering growth.

The outcomes suggest that the government has not lived up to its commitments to the International Monetary Fund that it would promote policies for private investment in power generation through both the entry of new players as well as expanding the existing capacity of those independent power producers that were adhering to the energy mix targets and least-cost generation plans.

Published in The Express Tribune, May 24th, 2016.

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Reader Comments (5)

  • Pankaj
    May 24, 2016 - 3:10PM

    Isn’t it funny that Pakistan is publishing per capita income data when they don’t even know the population of Pakistan? Last time census happened in Pakistan was decades before.Recommend

  • just_someone
    May 24, 2016 - 3:31PM

    @Pankaj:
    If you had any knowledge about statistics, you would know that you don’t need a census to compute economic variables.
    All statistics are based on samples which attempt to estimate the population, within a margin of error.
    Now go back to your Indian newspaper, where I’m sure they survey a billion plus people for each and every statistic .Recommend

  • dud
    May 24, 2016 - 7:27PM

    @just_someone:
    do you have any idea how per capita income measures?
    it seems you have no idea whats news about.
    please educate yourself before making fun of yourself here.Recommend

  • just_someone
    May 25, 2016 - 12:51AM

    @dud:
    My friend, I am a PhD macroeconomist…
    I know what I am talking about…Recommend

  • JC
    May 25, 2016 - 10:48AM

    @just_someone: Your degrees not withstanding, @Pankaj does have a point. There has been no census data since 1998, which is 18 years ago. Further, Pakistan has an unknown, but high rate of population growth. Percentage growth of population is compounded, and if instead of 2% rate you assume 2.1% rate, the numbers will be off over a 18-year span (roughly by about 1.5%). The long gap since the census and the unknown population growth rate make per-capita-GDP estimates unreliable. Further, we are not even talking about the estimates of economic growth rate which everyone agrees is a shambles. Irrespective of whether your argument is right or wrong, holding a regular census and providing the correct economic growth data will give us confidence that the estimates are right. As citizens we have a right to know how the numbers were arrived at and what is the degree of uncertainty.

    Finally, why sneer at the Indians? They actually do a pretty good job given their constraints. At least they hold a census every ten years which we don’t. They also have a long history in statistical analysis and are pretty good at it judging from what I know.Recommend

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