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BY:
ZOHAIB ELLAHI
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Introduction Fiscal Deficit Challenges Faced In 2010-11 Inflation Per Capita Income

Circular Debt
Effects On Pakistan Industry Manufacturing Industry Agriculture Industry

Conclusion
Q&A

Financial Year 2010-11

GDP Target = 4.5 %
GDP Attain = 2.4 %.

CAUSE
Devastating Flood in year 2010. Rise in Oil Prices.

Negative Effects

Flood cause a damage of 10 billion dollars to Pakistans economy.

20 million peoples were displaced.

50,000 sq. Km area submerged in water. The destruction of major crops, particularly rice and cotton, led to a negative growth of 04 % in this sector. Oil prices rises from $70/barrel to $125/barrel. The manufacturing sector growth was adversely affected due to reduced output in the petroleum products.

Positive Effects

On the other side exports registered a growth of 28 % in the first 10 months of the year compared to same period last year.

Crossing the $20 billion mark for the first time, exports are set to exceed
$24 billion. The remittances have also recorded a strong performance and are set to reach the level of more than $11.2 billion. Moderated demand for imports shows a surplus of nearly $748 million. Services sector witnessed positive growth of 4.1 %. positive developments reflected in the growth of external reserves

These

which also touched a historic high of $17.1 billion at the end of April, 2011.

The fiscal deficit for the year 2010-11 was

expected to remain 04 % of GDP however, due to

unfavorable circumstances, it grew to 5.1 %.

Devastating flood in 2010.

Security confront.
Increased oil prices in international market which affected the performance of industrial and manufacturing sector.

Inflation estimated at 9.5 % in FY 2010-11.

The cumulative inflation rose to 14.1 % in July-April

2010-11. Food inflation has worked as stimulant in the index with its 18.4 % increase.
Transport group - 16.5 %

Energy group - 14.9 %

Textile group - 11.7 %.

Pakistans per capita income has risen by 0.7 % in

2010-11 as against 2.9 % last year.

In dollar terms it rose from $1073 last year to $1254 in 2010-11, showing increase of 16.9 %. It is because of stable exchange rate as well as higher growth in nominal Gross National Product

(GNP).

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Circular debt problem in Pakistan's power sector

Power producers sell power to distributors who are

unable to collect full payment from power users, naturally distributors are unable to make full

payment to producers, who fail to make full

payments to fuel suppliers. Fuel suppliers stop supplying fuel (furnace oil etc) which leads to lower production shedding.
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and

consequent

widespread

load

Manufacturing Industry. Agriculture Industry. Power Industry.

Livestock.

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The Large Scale Manufacturing (LSM) managed to register positive growth of 1.71 % during the period July-March 2010-11. The main contributors to this modest growth include;
leather products -30 % Automobile -14.6 %

Food, beverages and tobacco - 9.3 %

Paper and board - 2.9 % Chemical - 1.4 % Fertilizer - 0.8 % Pharmaceutical - 0.5 % Textiles - 0.2 %.

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The agriculture sector in the country registered 1.2 % growth

during the FY 2010-11 as against the growth target of 3.8 %.

The unprecedented floods in July 2010 destroyed two major crops including rice and cotton.

Major crops accounting for 31.1 % of agriculture value added,

registered a negative growth of 4.0 % for second year in a row mainly because of decrease in production of rice and cotton 99.9 % and 11.3 % respectively.

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Minor crops accounting for 10.9 % of overall agriculture

value addition grew by 4.8 % as against the negative growth

of last two years.

The livestock sector recorded growth of 3.7 % as against 4.3 % growth of last year. Fishery sector grew by 1.9 % as against last years growth of 1.4 %. Forestry has experienced negative growth of 0.4 % as against last years positive growth of 2.2 %.

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Major area which needs focus;

Agriculture industry - we are basically an agricultural
country so our main focus is to strengthen our agriculture industry.

Livestock sector.
Power Sector It is one of the main source required to run an industry. Due to the decline in growth of power sector other related industries also suffer big problems.

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QUESTIONS ??

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