ISLAMABAD: Pakistan’s per capita income in dollar terms has slashed down by 8.23 percent to $1,516 in the current fiscal year 2018-19 compared with the $1,652 in last financial year.
The government is going to release the figures of per capita income and key other economic indicators in the upcoming Economic Survey for 2018-19 just ahead of budget 2019-20. However, official figures available with The News disclosed that the per capita income has been on the decline in Pakistan owing to devaluation done in the outgoing fiscal year.
The per capita income as well as the size of national economy in dollar terms has reduced in the outgoing fiscal compared to the last financial year.
The National Accounts Committee (NAC) which met this week has estimated that the size of Pakistan’s economy has shrunk in dollar terms reducing to $291 billion in outgoing fiscal year 2018-19 against $315 billion in revised figures of last financial year 2017-18. The provisional GDP growth had already nosedived to 3.29 percent against the fixed target of 6.2 percent for outgoing fiscal year and all envisaged targets were missed out by a huge margin.
The per capita income in rupee term has gone up from Rs181480 per person in Pakistan in last financial year which has now increased to Rs206093 in 2018-19.
In another alarming development, the government has failed to achieve two other key targets during the outgoing financial year as the investment to GDP ratio and savings to GDP ratio were missed out.
The investment to GDP ratio has also reduced to 15.4 percent against the desired target of 17.2 percent in outgoing fiscal year.
The investment to GDP ratio was estimated at 16.4 percent in provisional figures but in revised figures it stood at 16.7 percent of GDP for the last financial year under PML (N) led regime.
The savings to GDP ratio stands at almost stagnant in the range of 11.1 percent in 2018-19 against the desired target of 13.1 percent of GDP. The savings to GDP ratio stood at 10.4 percent during last year.
The slight improvement in savings to GDP ratio has been demonstrated because of reduction in current account deficit from $19 billion last fiscal year to around $11.6 billion for the outgoing fiscal year.
The low investment and savings in percentage of GDP continued to remain the largest challenges for the country’s economy because such low level cannot fuel long and sustainable growth trajectory.
“The massive depreciation of rupee against dollar in the range of 34 percent has played havoc with the per capita income and the countrymen’s income in dollar terms have slashed down by over 8 percent instead of increasing during the outgoing financial year” top official sources confirmed to The News here on Saturday.
Total investment for 2018-19 was recorded at 15.4 percent of GDP compared with 16.7 percent in 2017-18. The fixed investment to GDP ratio also declined during the outgoing fiscal year. But more alarmingly, the private sector investment remained stagnant at 9.8 percent in the outgoing fiscal year as it was standing at the same ratio in the last financial year 2017-18.
The private sector investment possessed potential to grow but it remained stagnant indicating dismal performance on the economic front.
The national savings in percentage of GDP were around 10 to 11 percent during 1960s, which increased to above 15pc in 2000s, but declined afterwards.
Pakistan’s saving rate also compares unfavorably with that in neighbouring countries: last five years average saving rate in India was 31.9pc, Bangladesh 29.7pc, and Sri Lanka 24.5pc.
Similarly, domestic savings (measured as national savings less net factor income from abroad) also declined from about 15pc of GDP in 2000s, to around 10 to 11 percent in recent years.
Without boosting investment and savings, Pakistan’s dream of achieving long and sustainable growth trajectory in the range of 7 to 8 percent for 10 years cannot be materialized. When GDP growth picks up, it results into increasing imbalances on external accounts because the low investment could not fuel the GDP growth.
