PAK ECONOMY MARGINALLY GROWS IN REAL GDP TERMS
PAKISTAN HAS ONE OF THE BEST-ENDOWED AGRICULTURAL SECTORS IN THE WORLD
Sep 29 - Oct 12, 2008
The size of Pakistan economy in real GDP terms stood at $94.9 billion (Rs 5,822 billion) at market price base in the financial year 2007-08 against $90.6 billion in the previous financial year.
At fixed rate, the real GDP size of the country's economy touched $89.5 billion (Rs 5,493 billion) in the financial year 2007-08.
In terms of nominal GDP growth, the size of Pakistan's economy stood at $170.8 billion in the financial year 2007-08 against $143.9 billion in the previous financial year. The nominal growth of Pakistan's economy achieved 19.7% growth in the financial year 2007-08.
Experts told PAGE that the country fetched 13% growth in the investment in FY 2007-08 compared to the previous financial 2006-07. The growth in public investment stood at 28% in the FY 2007-08 against 20% growth registered in the previous fiscal. The private sector investment, however, declined, as it stood at 10% in FY 2007-08 against 13% growth in the previous fiscal 2006-07.
On the other hand, the production of rice stands at 5.6 million tons in the financial year 2007-08 against envisaged target of 5.7 million tons. The cotton production estimated at 5.9 million tons against 6.5 million tons in the previous fiscal year. The production of sugarcane registered an increase as it stood at 63 million tons in FY 2007-08 against 54 million tons in last fiscal 2006-07.
Moreover, the rice exports from the country during July-August of current financial year (2008-09) were increased by 147.34 percent when compared to the corresponding period of the last financial year. A total of 403,935 metric tons of rice costing US $366,582,000 was exported during the period under review as compared to export of 307,641 metric tons of rice costing US $ 148,208,000 during the same period of previous financial year, official figures show.
The export of Basmati rice witnessed 84.82 percent increase as it grew from $ 109,864,000 during the first two months of last financial year to $ 203,047,000 during July-August (2008-09). Export of other rice quantities was recorded at $163,535,000 during July-August (2008-09) as against $ 38,344 during the same period of last financial year, showing an increase of 326.49 percent over the previous year.
Rice export during the month of August witnessed increase of 72.44 percent as compared to the same month of last financial year, however it witnessed decrease of 44.22 percent when compared to July 2008.
The rice export during August was recorded at 147,102 metric tons as compared to 141,093 metric tones during August 2007 and 235,317 metric tons in July 2008.
Export of Basmati rice during the month under review witnessed increase of 41.65 percent when compared to the same month of last financial year and registered decrease of 35.80 percent when compared to July 2008. The export of other rice quantities witnessed increase of 158.42 percent and decrease of 53.53 as compared to August 2007 and July 2008, respectively.
Moreover, experts called for withdrawing the general sales tax (GST) on fertilizer and pesticides in order to improve the ratio of output to input prices and thereby stimulating agriculture production.
Pakistan has one of the best-endowed agricultural sectors in the world having one of the world's largest contiguous areas, rich soil created by deposits and hard working farmers who have shown their ability to absorb new technologies when presented with the opportunities to do so.
They experts say the rise in the price of wheat has affected the prices of other food grains-commodity prices normally move in tandem-and has changed the sectoral terms of trade in the favor of agriculture.
Wheat is the country's most important crop. The anticipated income the farmers draw from cultivating wheat significantly affects what else they grow. In determining the procurement price of wheat-the subject should continue to be handled by the federal government-the government must keep in view the level and expected trends in international prices, they said.
The benefit of these should be passed on, to the extent possible, to agricultural producers. For that to happen, there should not be a large difference between the government's procurement price and the price in international markets, they pointed out.
The experts say Pakistan has a rich inheritance of elaborate irrigation infrastructures. Impressive improvements to this network have been made as a part of the agreement with India on the distribution of the waters of the Indus River systems. But these were replacement works; they did not result in bringing much additional land under cultivation. However, not enough attention was paid to maintaining this system and for improving it to preserve water. In recent years, the Punjab and Sindh governments, encouraged by the World Bank, have begun to devote sizeable resources to maintenance, the report says. Punjab, in particular, has gone further by developing a fairly elaborate system of information available on the internet to monitor the flow of water. This information is available to both users of water as well as those who manage the system. As the provinces strengthen their capacity to get engaged in economic development, it is important that maintenance work on the system of irrigation and improving its efficiency receive a high government priority. Within the sector of agriculture, they say livestock has acquired a more prominent place and modernization of livestock markets need to be promoted.
The sector contributes almost half to agriculture's gross output which translates into a contribution of over 10-percent to GDP. It engages 35 million people in the rural economy and provides almost 40 percent of total income of the farming community. The sector is dominated by small operators; those owning less than two animals account for slightly more than two - fifths of the total population of cattle and buffaloes.
Improving yields in the livestock sector would make a significant contribution to increasing value added in agriculture. It would also have a profound impact on reducing the incidence of poverty in the countryside, the experts believe.