GDP growth estimate for next fiscal year set at 4.8%: Asad Umar

The Annual Plan Coordination Committee (APCC) has approved the federal Public Sector Development Programme (PSDP) outlay of Rs900 billion besides endorsing the Gross Domestic Product (GDP) growth rate target of 4.8 per cent for the upcoming fiscal year 2021-22, Minister for Planning, Development and Special Initiatives Asad Umar said.

“The size of federal PSDP has been increased by 40 per cent from Rs650 billion to Rs900 billion next year which would be the highest expenditures in one year in history of Pakistan,” he said while addressing a press conference in Islamabad on Friday.

He said this increase in the PSDP would crowd in more investment that would contribute to the 0.25 per cent increase in the country’s GDP growth.

Recalling the higher growth of 5.4 per cent during the previous government, the minister said that during that year, the country’s current account deficit (CAD) stood at around $20 billion or 6 per cent of the total GDP.

Also read: 4% GDP growth beats gloomy forecasts

On contrary, he said during the current fiscal year the current account would post a minor surplus while next year the CAD would stand at $2.3 billion or 0.7 per cent of the GDP.

“Our economy can bear the current account deficit of up to 2 per cent of GDP,” he maintained.

Asad Umar said the current year’s GDP growth of 3.94% was based on productive sectors, however, during the previous government, the growth rate was consumption driven which was not a healthy sign for any economy.

He said the Gross National Product (GNP) in which remittances were also included posted a record increase of 6.5 per cent as compared to the previous year which was the highest in 16 years.

He said the APCC in its meeting today also approved the annual plan for the upcoming fiscal year according to which the investment to GDP ratio was set at 16 per cent as compared to the current year’s ratio of 15.2 per cent.

Similarly, he said the remittances which would reach $29.1 billion by end of the current year would be increased to $31.2 billion by the next fiscal year.