Islamabad: The Economic Coordination Committee (ECC) of the Pakistani Cabinet was briefed about rising inflation, expanding current account deficit, falling exports and remittances, lower industrial output and increasing trade balance.
Finance Secretary Tariq Bajwa’s update on Thursday to the committee headed by Finance Minister Ishaq Dar was contrary to the official story of an economic turnaround, Dawn online reported.
According to sources, the committee was informed that the growth rate in large-scale manufacturing in the first seven months (July-January) of 2016-17 was down 0.04 per cent.
It grew 3.90 per cent in the seven months of this fiscal year against 3.94 per cent a year ago.
The total tax collection was 7.6 per cent higher year-on-year in seven months, and the main revenue driver — General Sales Tax — was down 0.3 per cent from a year ago.
Exports in seven months fell 1.3 per cent to $12.32 billion this year. In contrast, imports increased 9.2 per cent to $25.54 billion in the same period.
As a consequence, the trade deficit expanded more than 21 per cent to $13.22 billion while current account deficit widened 90 per cent to $4.72 billion in seven months of 2016-17.
This was also contributed by a marginal fall in remittances that stood at $10.95 billion in seven months against $11.16 billion a year ago.
The ECC in an official statement said: “The committee showed concern over the widening of current account deficit and the Finance Minister urged to increase exports of goods and services to bridge the gap.”
The ECC was told that inflation was rising again. Measured by the Consumer Price Index, inflation increased at the rate of 3.9 per cent in the first eight months of 2016-17 against 2.5 per cent last year.
The net inflow of foreign direct investment (FDI) surged 52.7 per cent in July-January to reach $1.83 billion against $1.2 billion a year ago.
According to the Finance Ministry, wood, leather, engineering, chemicals and coke and petroleum products registered a decline over the last year.
Products showing positive growth included iron and steel, electronics, non-metallic minerals, pharmaceuticals, food beverages and tobacco, automobiles, paper and board, fertiliser and rubber.
According to the ECC statement, the outlook of the industrial sector was positive and encouraging as credit to the private sector has expanded more than 22 per cent.
The industrial sector is improving due to persistent growth in electricity generation and gas production in January, it said.
The ECC noted that imports were coming in the machinery group that showed productivity, it added.
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