Planning ministry barred from launching Annual Plan 2017/18

ISLAMABAD: The government on Wednesday barred the ministry of planning from launching the Annual Plan for 2017/18 ahead of unveiling the Economic Survey for 2016/17.

The ministry of planning, development and reforms on Tuesday invited all the ministry officials to attend the launching of the Annual Plan for 2017/18 on May 24.

However, the finance ministry objected to the launching of the Annual Plan for 2017/18 ahead of releasing the Economic Survey, which, according to it, could spoil the importance of the document.

This event is considered important one in the budget making exercise and the finance minister is supposed to launch this important official document on Thursday (today).

Earlier, the Finance Ministry had out rightly rejected the current account deficit (CAD) projection made by the Planning Commission. The finance ministry had asked the commission to revise the same downwards according to the projections of the Finance Division.

The Planning Commission had projected the CAD at 3.1 percent of GDP, or equivalent to $10.4 billion, for the next financial year 2017/18 against 2.8 percent of GDP registered so far in the first 10 months (July-April) period of the outgoing financial year 2016/17.

Now the current account deficit’s projections were revised downward from 3.1 percent of GDP to 2.6 percent of the GDP in order to bring it in line with the finance ministry, as the top guns of the ministry claimed that they made commitment with the International Monetary Fund (IMF) to slash down the CAD in the next financial year in order to avoid pressures on balance of payments position.

After revising downward projection for CAD, the Planning Commission argued that in the wake of the declining trend in exports, concerted efforts are required to diversify exports and look for new markets. 

Trade deficit is projected to be at $ 25.7 billion. Exports are projected to grow 6.2 percent, while imports are projected to increase 7.4 percent. The current account is projected to be in deficit by $9 billion in 2017/18, ie, 2.6 percent of GDP.

“Non-debt creating financial inflows are expected to bridge the current account deficit without exerting pressure on the foreign exchange reserves,” the PC added.