The savings and investment of Pakistan declined during the last fiscal year however, the gap between the two remained the same as compared to 2013, the State Bank of Pakistan (SBP) said today.
The gap between the two has remained the same, at minus 1.1 per cent compared to fiscal year 2013, the bank said in a statement.
According to analysts, this decline reflects poor economic growth.
Banks have been investing over 80 per cent deposits into the government papers while depositors were facing continuous high inflation.
The Monetary Compendium for July 2014 said the target for the FY14 was set at 15.1 per cent of gross domestic product (GDP) which fell to 14 per cent, lower than 14.6 per cent in fiscal year 2013.
The private sector investment fell to 8.9 per cent, close to the target of 9 per cent, from 9.6 per cent in FY13.
Low investment has been a persistent problem for the country as it kept the economic growth much below the average growth rate.
Public and general public investment slightly increased during the last fiscal year, increasing to 3.5 per cent as compared to 3.3 per cent in FY13.
However, it fell significantly lower than the target of 4.5 per cent.
The most crucial were the savings which further declined, keeping the country among the lowest savings rates in the region, excluding Afghanistan.
The national savings fell to 12.9 per cent from 13.5 per cent a year before. The rate is about 26 per cent in India.
The State Bank reported that the domestic savings also declined to 7.5 per cent from 8.3 per cent in the preceding year. The main reason for this is increasing cost of living in the country.
