Pakistan's economy grew at an average rate of 3.29 per cent in fiscal year 2018-19 against an ambitious target of 6.2 per cent set in last year's budget, the Pakistan Economic Survey revealed on Monday.
The government unveiled the Economic Survey 2018-19 -- a report card displaying all economic indicators and how the Imran Khan government performed in its first year in power.
Advisor on Finance Abdul Hafeez Shaikh who unveiled the Economic Survey at a press conference ahead of the announcement of budget on June 11, said burgeoning debt has become major burden for Pakistan's economy.
"The previous governments took Rs 31,000 billion loans in the last 10 years, he said. Now we have to pay Rs 3,000 billion as interest on those loans.
He said the country had also accumulated around USD 100 billion external loans which included USD 9.2 billion in the tenure of the current government that came to power in August last year.
The advisor admitted that new loans were being used to pay off old debt.
He said the government this year spent Rs 2.3 trillion beyond its revenues by printing new currency which created inflation.
"If you spend trillions beyond your income, you will need to borrow, print money and increase prices. These all lead to increased inflation, he said.
He said the national entities like Pakistan Steel Mills, Pakistan International Airlines, Pakistan Railways and others were running into losses and governed had to spent Rs 1,300 billion to keep them operational which put a lot of pressure on economy.
Shaikh said that stability of economy was first priority which would be done by generating more resources and austerity.
I don't want to create panic by giving the correct picture of economy, he said, adding more details will be presented in the budget speech.
The survey showed that the government missed targets set for the outgoing fiscal including 6.2 percent growth, as the economy grew by merely 3.29 per cent.
The agriculture sector grew by 0.85 per cent against target of 3.8 per cent. The industrial sector grew by 1.4 per cent against the target of 7.6 and manufacturing sector was down by 0.3 per cent.
The large scale manufacturing showed a negative growth of 2 per cent against the target 8.1 while service sector grew by 4.7 per cent against the target of 6.5.
The construction sector achieved the growth of 7.6 per cent against target of 10 per cent.
The fiscal deficit was recorded at 5 per cent of the GDP compared to 4.3 in the corresponding period last fiscal.
However, Shaikh dismissed the dismal performance by saying the previous budget target were set by the government of Pakistan Muslim League-Nawaz and they were unrealistic.
Advisor on Commerce Razzak Dawood, who was with Shaikh, said that due to some difficult decision made by the government the trade deficit during current fiscal was reduced from USD 73.6 billion to USD 32 billion.
He said that de-industrialisation had stopped due to policies of the government. He said new Free Trade Agreement (FTA) was also finalised with China which will help industry.
Minister for Power Omar Ayub said that power generation improved due to better management. He said there was USD 80 billion investment opportunity in power generation and distribution sector.
Chairman Federal Bureau of Revenue (FBR) Shabbar Zaidi said that government was trying to increase tax base. He urged that rich to pay taxes.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)