ISLAMABAD: The Finance Ministry on Thursday released the Economic Survey of Pakistan for the outgoing fiscal year 2011-12, DawnNews reported.

According to the economic survey — an annual pre-budget document highlighting the economy’s performance in the previous year — the government failed to achieve its growth targets in the previous year.

Finance minister Abdul Hafeez Shaikh estimated GDP growth for this fiscal year ending in June at 3.7 per cent on Thursday, falling short of the government’s forecast after floods damaged the agricultural sector and due to a weak global economy.

The government had forecast 4.2 per cent growth for 2011/12.

Dr Hafeez Sheikh said a 3.7 per cent expansion would still be the best performance since 2007/08.

“If we compare it to the 3 per cent last year, then this is the highest economic growth in the last three years,” he said.

Dr Sheikh blamed rising global oil prices, a weak global economy and poor security situation back home as major reasons for the failure to achieve the targets.

“If oil prices increase in the global marketplace, it has a direct adverse effect on the economy,” said the finance minister while addressing the media in Islamabad.

Shaikh said the economy would have grown at a higher rate but was hampered by extensive flood damage to crops and infrastructure in the Sindh and Balochistan provinces, and threats to the global economic recovery.

“Is (the GDP growth rate) rising in the way we want? No,” he said, while unveiling Pakistan’s economic survey for 2011/12.

According to the survey, the government’s fiscal deficit in the first 10 months (July-April) of 2011/12 stood at 5 per cent of GDP, compared to 5.5 per cent in the same period the previous year.

The agriculture sector grew by an estimated 3.1 per cent in 2011/12, the survey showed, compared to 2.4 per cent growth the previous year. The sector accounts for 21 per cent of GDP, 45 per cent of employment and 60 per cent of exports, according to the survey.

The manufacturing sector grew by an estimated 1.1 per cent expansion, against 1 per cent growth the previous year, while the services sector expanded 4 per cent, compared to 4.4 per cent in 2010/11.

Inflation contained

The Finance Minister claimed the government was able to curtail inflation better in the outgoing year as compared to previous years.

“We have been successful in bringing down inflation to 10.8 per cent in the first ten months [of the outgoing fiscal year] as compared to the 13.8 per cent in the previous year,” said Dr Sheikh.

According to the Economic Survey: “The inflation rate as measured by the changes in Consumer Price Index (CPI) stood at 10.8 per cent during (July-April) during current fiscal year 2011-12, against 13.8 per cent in the comparable period of last year.

However, inflation has been contained during current fiscal year as compared to last year due to tight monetary policy, better supply management and regular monitoring of prices and supply chain by the Cabinet and National Price Monitoring Committee.”

Tax collection

“We have brought up tax collection in the first 10 months this year to Rs1.449 trillion, compared to the same period last year, it was Rs1.250 trillion,” said the finance minister, adding that tax collection 25 per cent in a year was “unprecedented in Pakistan’s history.

“Tax collection by the FBR was targeted at Rs 1952.3 billion for fiscal year 2011-12. Revenue collections of FBR stood at Rs 1426.0 billion during July-April 2011-12, thereby reflecting 24.0 per cent growth over Rs 1149.8 billion collected during the corresponding period last year,” states the economic survey.

“Among the four federal taxes,” adds the survey, “the highest growth 33.7 per cent has been recorded in sales tax receipts, followed by customs 17.7 per cent, and direct tax 22.6 per cent.”