Macroeconomic targets revised downward

Macroeconomic targets revised
By Khaleeq Kiani
ISLAMABAD, June 1: The government has revised some of the major macroeconomic targets for the current financial year mainly because of poor performance in key sectors of the national economy in the first 10 months of the year, official documents suggest.To start with, the target for growth in industrial production has been reduced by almost half -- to 6.8 per cent from 11 per cent projected in the budget. The target for large-scale manufacturing has also been brought down to 8.8 per cent from 13 per cent envisaged in the budget.This was mainly because of a dismal show by the industrial sector, particularly by the LSM where the automobile industry, fertilizers, engineering and paper and board besides some others registered a decline in growth.In agriculture, cotton production target has also been revised to 13 million bales from the original target of 13.82 million bales, showing a reduction of 0.82 million bales. Similarly, rice production did not come up to the target of 5.7 million tons set in the budget and, hence, has been revised to 5.4 million tons. Wheat and sugarcane production, however, remained higher than the budgeted targets.The target for private sector investment has been increased to 16.20 per cent of the GDP from the 14.30 per cent fixed earlier. However, the total public sector investment has been reduced to 5.20 per cent from the original estimate of 5.60 per cent of the GDP. Similarly, the public sector development programme was originally projected to be around 4.70 per cent but has now been reduced to 4.10 per cent.On the trade side, the export target has been brought down to $17.20 billion from the original projection of $19.80 billion, showing a reduction of about 13 per cent. Imports have also slowed down and as a result the target has been reduced slightly to $27.10 billion compared with the original estimate of $27.40 billion.Therefore, the total trade deficit target has been increased to $9.90 billion from the original estimate of $7.60 billion, up by more than 30 per cent. The target for trade deficit in services has also been increased to $8.30 billion from the original projection of $7.70 billion. Private transfers and remittances, however, performed better than expected and helped containing the overall current account deficit, which otherwise might have been quite higher.The current account deficit target has also been increased for the current year to $7.10 billion compared with the original target of $6.30 billion. The inflation target has also been increased to 7.60 per cent instead of the original target of 6.50 per cent, mainly because of the government’s inability to contain food prices.