Private sector investment unchanged at around 9% amid SIFC efforts

ISLAMABAD: Pakistan’s total investment plunged into the lowest range despite a slight improvement in the outgoing fiscal year 2024-25, mainly due to the assumption of reliance on increased public investments.

Private sector investment stagnated, standing at 9.1 percent in the current fiscal year compared to 9 percent in the last financial year.

There has been no change in private investment despite the tall claims made by the Special Investment Facilitation Council (SIFC) to facilitate higher investments. This year’s growth figure of 2.7 percent has raised many eyebrows and shocked many independent economists.

The assumption of increased public investment through the projection of a spending spree on development funds will fuel the growth rate to achieve 5.3 percent growth in the last quarter. This will help the government display the provisional growth rate of 2.7 percent in totality for the whole financial year. According to the National Accounts Committee (NAC) approved figures of investment and savings in percentage of GDP for the current fiscal year, the public investment has gone up from 2.4 percent in the last fiscal year to 2.9 percent of GDP in the ongoing fiscal year. It clearly indicates that the government is going to utilize Rs500-600 billion development funding to spur growth in order to achieve the desired figure of 2.7 percent growth rate in the current fiscal year. Pakistan’s total investment as a percentage of GDP has gone up to 13.8 percent in the current fiscal year compared to 13.1 percent in the last financial year. In the last fiscal, the investment was at its lowest ebb in the last 50 years. In the ongoing fiscal year, in stocks, there is no change in investment. For fixed investment, it has gone up to 12 percent in the current fiscal year compared to 11.4 percent in the last fiscal year. The savings to GDP ratio stood at 14.1 percent in the current fiscal year against 12.6 percent.