ISLAMABAD: Industry boomed while agriculture collapsed during the current financial year, according to data released in the Economic Survey. A cotton-led collapse in agriculture dragged the economy down, leading the government to miss its growth target of 5.5 per cent by a significant margin in the current financial year as real gross domestic product (GDP) grew at a rate of 4.7pc — still better than the last eight years.

Finance Minister Ishaq Dar wasted no time in getting to this point. “Agriculture production has unfortunately remained negative 0.19pc against a growth target of 3.9pc,” he conceded at the very outset of the event launching the Pakistan Economic Survey 2015-16 here on Thursday.

He also found the confidence to declare that Pakistan needs no new IMF programme once the current one expires in November. “The government has no intention to go back to the International Monetary Fund for a new programme,” he declared, pointing to the improved fundamentals contained in the Economic Survey.

He said the government had stabilised the national economy as promised before the 2013 elections and the goal going forward was to achieve higher economic growth. “The nation should rest assured we have moved out of the legacy … have achieved stability and are set to consolidate gains with growth without comprising on fiscal discipline.”

With a 28pc fall, this year’s diminished cotton crop shaved off 0.5pc GDP which would otherwise have increased by 5.1pc. “Cotton led the decline and others also followed,” Mr Dar said, adding that it would be the biggest challenge of budget, due today (Friday), to figure out how to rescue agriculture from its doldrums.

The other challenge he outlined for himself was a fall in exports of almost 10pc over the last financial year.

The industrial and services sectors saved the day for the government, although their growth grew from narrow bases in automobiles, construction, fertiliser, pharmaceuticals and a few more.

The minister had to struggle to defend the 4.7pc growth figure as he faced repeated questions about the credibility and autonomy of the Pakistan Bureau of Statistics (PBS) whose chief statistician, a former bureaucrat, served the Ministry of Finance for almost two decades. The secretary statistics division also found himself in the spotlight since he was Mr Dar’s principal staff officer until recently.

The PBS is an autonomous body and is supposed to function independently of any influence from the government, particularly the finance ministry. Both gentlemen in question sat in uncomfortable silence on both sides of the finance minister while he fielded the questions and offered to make the PBS more autonomous.

Mr Dar said the cost of war on terror to the national economy had now touched $118.3 billion, although it appears to be receding this year on account of an improvement in the security situation. The estimated losses suffered by the economy due to the war on terror have declined by almost 40pc from last year, touching $5.56bn this year. The minister attributed this to the success of the Zarb-i-Azb operation and implementation of the National Action Plan.

He said the government could not afford to lose sight of any sector as agriculture and industry had 21pc share each in the economy with 58pc share of the services sector. “We will try to take major corrective measures for agriculture in the budget,” he promised.

The pace of industrial activity has picked up as its growth rate reached 6.8pc this year, compared to 4.81pc last year. The performance was slightly above the target of 6.4pc set at the start of the year. Large-scale manufacturing (LSM), on the other hand, missed the growth target of 6pc, coming in at 4.61pc, still above last year’s turnout which was 3.29pc.

Automobiles led the increase in LSM, registering a large growth of 23.4pc, followed by fertiliser at 15.9pc, leather products 12.18pc, rubber 11.7pc, cement 10.4pc, chemicals 10pc and pharmaceuticals at 7.1pc. The LSM was marred by the closure of Pakistan Steel Mills due to suspension of gas supply by SSGCL, reported the Economic Survey.

Power generation maintained its growth trend from last year, increasing by 12.2pc, while construction boomed at 13.1pc, more than double its growth rate last year.

The services sector met its target of 5.7pc growth, even though its two major components registered below target growth. Transport and communications sector came in at 4.06pc against the target of 6.1pc. Wholesale and retail trade also failed to meet 5.5pc growth against 5.5pc improvement last year.

Published in Dawn, June 3rd, 2016