Economic Survey 2009 ~10 Growth and Investment

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Growth and Investment 1

A measure of macroeconomic stability achieved over the past two years has kindled a
moderate recovery in the economy, despite one of the most serious economic crises
in the country’s recent history. The economy grew by a provisional 4.1% in the
outgoing year, after a modest growth of 1.2% in 2008 ~09. However, the recovery in
the economy is less than secure.

First, the durability of the incipient economic turnaround is far from assured given the
significant challenges the economy faces. Second, not all sectors of the economy or
regions of the country appear to have participated so far in the modest upturn. Finally,
from the perspective of strong job creation, overall growth is still not robust enough. In
fact, latest official estimates suggest a moderate increase in unemployment.

The macroeconomic context remains difficult in the near term. However, the
successful resolution of some of the critical challenges the economy has faced in
2009 ~10, such as the energy and water shortage, and a disturbed internal security
situation, could lay the basis for higher growth in 2010 ~11. In addition, the economy
could benefit from large initial productivity gains as capacity utilization begins to
increase from a low base. For the longer term, however, without a resolution of
Pakistan’s perennial structural challenges, such as raising the level of domestic
resource mobilization or promoting higher productivity in the economy, growth and
investment will continue to be constrained, and the growth path unstable.

1.1 Global developments

The outgoing year witnessed the making of a global recovery. Leading indicators, and
upgraded projections from the IMF, have so far pointed to a sharp rebound in the
world economy. The latest projections from the IMF are for world output to increase by
4.2 percent in 2010, against an estimated contraction of 0.6 percent in 2009. However,
as noted in the World Economic Outlook for April, the recoveryis “uneven”in terms of
regions and countries, and is “fragile”.

After the steepest fall since World War II, global trade is expected to pick up
moderately in the current year. Early signs of recovery in both global output and trade
have signalled improved prospects for Pakistan’s exports. The eruption of the Greek
debt crisis since April, and fears of wider contagion especially in the Euro ~zone,
however, threatens to disrupt the recoveryprocess.

1.2 Pakistan
Despite severe challenges, the economy has shown resilience in the outgoing year.
Growth in Gross Domestic Product (GDP) for 2009 ~10, on an inflation ~adjusted basis,
has been recorded at a provisional 4.1%. This compares with GDP growth of 1.2%
(revised) in the previous year.
For the outgoing year, the A gr i cu l ture sector grew an estimated 2%, against a target of
3.8%, and
 Economic Survey 2009 ~10

previous year’s growth rate of 4%. While the Crops sub ~sector declined 0.4% over the
previous year, Livestock posted a healthy rise of 4.1%. The performance of the
Agriculture sector was boosted by the weakening of the ElNino phenomenon, after late
winter rains.

Industrial output expanded by 4.9%, with Large Scale Manufacturing (LSM) posting a
4.4% rate of growth. The Services sector grew 4.6%, as compared to 1.6% in 2008 ~09.
Overall, the Commodity Producing Sectors are estimated to have expanded at a 3.6%
pace, which represents a significant turnaround from the anaemic growth rates of the
previous two fiscal years.

Table 1.1: Growth Performance of Components of Gross

National Product (Percent
Growth at Constant Factor
Cost)
2004 ~0 2005 ~06 2006 ~0 2007 ~08 2008 ~0 2009 ~1
COMMODITYPRODUCINGSECT 5
9.5 5.1 7
6.6 1.3 9
0.8 0
3.6
ORAgriculture
1. 6.5 6.3 4.1 1.0 4.0 2.0
~ Major Crops 17.7 ~3.9 7.7 ~6.4 7.3 ~0.2
~ Minor Crops 1.5 0.4 ~1.0 10.9 ~1.6 ~1.2
~ Livestock 2.3 15.8 2.8 4.2 3.5 4.1
~ Fishery 0.6 20.8 15.4 9.2 2.3 1.4
~ Forestry ~32.4 ~1.1 ~5.1 ~13.0 ~3.0 2.2
2. Mining & Quarrying 10.0 4.6 3.1 4.4 ~0.2 ~1.7
3. Manufacturing 15.5 8.7 8.3 4.8 ~3.7 5.2
~ Large Scale 19.9 8.3 8.7 4.0 ~8.2 4.4
~Small Scale* 7.5 8.7 8.1 7.5 7.5 7.5
4. Construction 18.6 10.2 24.3 ~5.5 ~11.2 15.3
5. Electricity and Gas ~5.7 ~26.6 4.7 ~23.6 30.8 0.4
Distribution
SERVICES SECTOR 8.5 6.5 7.0 6.0 1.6 4.6
6. Transport, Storage & 3.4 4.0 4.7 3.8 2.7 4.5
Communication
7. Wholesale & Retail Trade 12.0 ~2.4 5.8 5.3 ~1.4 5.1
8. Finance & Insurance 30.8 42.9 14.9 11.1 ~7.0 ~3.6
9. Ownership of Dwellings 3.5 3.5 3.5 3.5 3.5 3.5
10 .PublicAdmn. & Defence 0.6 10.1 7.1 1.2 3.6 7.5
11. Services 6.6 9.9 7.9 9.8 8.9 6.6
12. GDP (fc) 9.0 5.8 6.8 3.7 1.2 4.1
13. GNP (fc) 8.7 5.6 6.7 3.7 1.7 5.5
* Slaughtering is included under small scale sector Source: Federal Bureau of
Statistics

1.2 ~a Contribution analysis

For 2009 ~10, sectoral contribution to growth was as follows: Services contributed 59% to
overall growth in the economy for the year, followed by Industry (30%), and Agriculture
(11%). In terms of individual sectors, Manufacturing accounted for 23% of the outgoing
year’s overall growth, followed by Wholesale & Retail Trade (21%), and Social &
Community Services (19%).

Table 1.2 compares the structure of contribution to overall GDP growth for 2009 ~10, with
the previous five years. Growth in Agriculture contributed 11% to headline GDP growth for
the year, with Industry accounting for 30%. What stands out from the Table is the
 Economic Survey 2009 ~10
consistently high contribution to recent growth, averaging 62% for the past six years,
accounted for by the Services sector. In 2009~10, the share of services in headline growth
was roughly in line with its average, at 59%.
 Fig~1: Composition of GDP Growth

Growth and Investment

Table 1.2: GDP growth: Sectoral contribution

(Percent)
Sector 2004 ~05 2005 ~06 2006 ~07 2007 ~08 2008 ~09 2009 ~10 Avg
Agriculture 17% 24% 13% 6% 71% 11% FY05 ~FY10
24%
Industry 34% 19% 34% 10% ~41% 30% 14%
Manufacturing 30% 28% 24% 24% ~58% 23% 12%
Services 49% 57% 53% 85% 70% 59% 62%

Real GDP (fc) 100% 100% 100% 100% 100% 100% 100%
Source: Federal Bureau of
Statistics
03 2003 ~04 2004 ~05 2005 ~06 2006 ~07 2007 ~08 2008 ~09 2009 ~10 Source: Federal Bureau of Statistics

Another important point to note is the consistently declining contribution of

Manufacturing to the headline growth rate. From 30% in 2004 ~05, the manufacturing
sector’s share in growth has declined to 23% for the outgoing year.

In terms of contribution by expenditure (i.e. the composition of GDP growth),

consumption expenditure continued to account for a dominant share in growth,
accounting for 96% of GDP growth in 2009 ~10. The large weight of private
consumption expenditure in GDP was reflected in its share of 81% in the growth for the
outgoing year, with general government consumption expenditure accounting for the
balance 15%.

Reflecting the marginal decline in gross fixed investment for the year of ~0.6%, the
share of total investment was a nominal 1% in GDP growth. Adjusting for the assumed
contribution of Changes in stocks category, the contribution of gross fixed capital
formation (GFCF) was ~1%. Finally, reflecting the sharp reduction in the external current
account deficit, which is projected to decline to less than 2.8 percent of GDP for
2009 ~10 from 5.7 percent the previous year, share of Net Exports was 4%.
 Economic Survey 2009 ~10
The stronger pace of economic growth in 2009 ~10 has occurred on the back of several
favourable developments, which have included:
ig~4: Cotton crop and GDP growth, Year~ on~~3:
Fig year change
Annual 10.0
Remittances
9,000 8,000

7,000 6,000 Growth and Investment

Substantial transfers to the rural sector over the past two years via the
government’s crop support price policies, which, combined with higher worker
remittances, have sustained aggregate demand in the economy;

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Jul~Apr FY10

Source: Economic Adviser's Wing

Growth in Cotton Production (in percent)

A larger ~than ~expected cotton output, which offset the moderately negative impact
on the wheat crop caused by a delay in seasonal rains. The cotton crop continues to
exert a disproportionate impact on overall growth in the economy (Fig ~4).

An ongoing improvement in external demand for Pakistan’s exports, mainly textiles;

The revision of prior year’s growth rate, based on firmer data for the full twelve months
of 2008 ~09, as opposed to nine month data which is used at the time of preparing the
provisional estimate, resulted in an adjustment in the real GDP growth from a
provisional estimate of 2% to a revised 1.2%. The impact on the growth rate for
2009 ~10 is estimated at over one percentage point.
 Economic Survey 2009 ~10

1.2 ~b Investment

At current market prices, Gross Fixed Capital Formation (GFCF) has been estimated to
have declined ~0.6%, after recording a 5.5% increase in 2008 ~09. A decline in fixed
investment by the private sector has accounted for the overall change, with an
estimated contraction of 3.5% for the year. The bulk of the decline has occurred in
Electricity & Gas, Large Scale Manufacturing, Transport & Communication, and Finance
& Insurance. General Government GFCF is estimated to have risen 9.8%.

Table 1.3: Gross Fixed Capital Formation In Private, Public & General Government
Sectors By Economic Activity______________________________________________________________
(At Current Market Prices)
% Change
Sr # Sectors 2008 ~09 R 2009 ~10 P
2007 ~08 F 2008 ~09 R
Total GFCF (A+B+C) 5.5 ~0.6
A. Private Sector 5.3 ~3.5
Manufacturing 2.3 ~4.9
i. Large ~7.4 ~12.4
Scale& Gas
Electricity ~4.3 ~18.8
Transport & Communication ~3.9 ~14.2
B. Public Sector 3.9 2.6
C. General Government 7.7 9.8
F: Final, R : Revised, P: Provisional Source: Federal Bureau of
Statistics

Clearly, this development is not salutary for the long run prospects of the economy.
However, given the challenging circumstances in which the economy had to operate
during 2009 ~10, it is not surprising that the private investment response has remained
subdued.

A substantial decline in FDI inflow for the period also contributed to the decline in fixed
investment in 2009 ~10. FDI accounts for a high share of gross fixed investment in
Pakistan, with a share of close to 20 percent.

1.2 ~c Foreign Direct Investment

In line with a sharp decline in global flows of Foreign Direct Investment (FDI), which fell
32 percent in 2009 according to estimates of the International Institute of Finance (IIF),
direct investment from this source saw a steep reduction in Pakistan. For the period
July to April 2009 ~10, FDI totalled US$ 1.8 billion as compared to US$ 3.2 billion in the
same period of FY09. This represents a decline of 45 percent.

A large part of the decline in FDI for the period was recorded under
Telecommunications (a net decline of US$ 607 million), and Financial Services (a fall of
US$ 548 million). Combined , the decline in these two sectors, which related to a few
“lumpy” transactions last year, amounted to 81 percent of the overall reduction in FDI
in 2009 ~10.

Investment levels in some sectors remained healthy, including in Oil and Gas
exploration (FDI of US$ 605 million), Communications (US$ 222 million), Transport (US$
104 million), Construction (US$ 86 million), and Paper and Pulp (US$ 81 million).
Despite a steep decline, inflow of FDI into Financial Services was recorded at US$ 133
 Growth and Investment
million for the period.

A worrying development was the large net disinvestment recorded under the IT Services
sector for the
 Economic Survey 2009 ~10

year (amounting to US$95 million). Overall, out of the major industry categories, 12
recorded higher FDI for the period, while 24 industries witnessed a net reduction in
FDI inflow.

1.2 ~d International Competitiveness

International competitiveness remains a key issue for the economy, and improving it a
major challenge. The scale of the challenge is manifested in Pakistan’s global ranking
of 101 in the Global Competitiveness Index (GCI).

This issue of competitiveness is also manifested in Pakistan’s share of world exports,

which has declined over the past decade (from 0.16% in 2002, to 0.13% in 2008)
while the share of South Asia as a whole has increased from 0.27% to 0.34% over the
same period.

Apart from the “headline” numbers and statistics, however, the discussion on
competitiveness and relative productivity in Pakistan’s economy needs to be
nuanced. Firstly, a large part of the shift in relative market shares between Pakistan
and other South Asian countries represents trade di vers i on on account of the effect on
Pakistan of the difficult security situation it has been facing since 2002, rather than an
endogenous underlying dynamic. Secondly, developments on the competitiveness front
are not uniform throughout the economy. Some segments of the Textile industryare
doing well in international markets, while new exportproducts such as H al al meat and
Jewellery in particular are growing rapidly.

On the other hand, many Pakistani goods a n d services are finding it difficult to
compete even in the d o m e s t i c market. Construction services are an example, where
Chinese companies have made large inroads.

1.2 ~e Constraints to Growth and Investment

The incipient recoveryin the economy has come about in the face of strong
headwinds. Two severe challenges the economy had to navigate through in the
outgoing year were the sharp rise in the number of incidents of terrorism across the
country, and the scale and nature of the attacks, which affected growth and
investment. The global “war on terror”has been imposing a heavy cost on the
economy since 2001. A distinct intensification of the militants’campaign occurred
during 2009, with major urban centres in Pakistan being targeted. During 2009 ~10, a
total of 1,906 terror attacks were recorded in the country, resulting in 1,835 deaths
and 5,194 injuries, according to the National Crisis Management Cell, Ministryof
Interior. It is estimated that the cost to the economy of terrorism amounted to around
6 percent of GDP in 2009 ~10. A separate section is devoted to the impact on Pakistan
of the global “war on terror”.

The second challenge emanated from the energy crisis, which, due to factors detailed
in a later chapter on the subject, underwent an intensification during the outgoing
year. As a result, it is estimated that a loss of approximately 2.0 ~2.5 percent of GDP
occurred in 2009 ~10 on account of the energy supply constraint.

The overall cost to the economy emanating from Pakistan’s fight against terror is
discussed in the following section.
 Growth and Investment
1.2 ~f Impact on Pakistan of the “War on Terror”
Since 9 / 1 1 , Pakistan has been at the epicentre of the global “War on Terror”.
Between 2002 and end ~ April 2010, a total of 8,141 incidents of terrorism have
occurred on Pakistan’s soil, resulting in 8,875
 Economic Survey 2009 ~10

deaths of both civilians as well as personnel of law enforcement agencies (LEAs), and
injuries to a further 20,675 people. 1

Beyond Fig ~5: No.

statistics of of incidents
human & human
casualties, losses since
the cumulative 2002of the campaign of terror
effects
unleashed in Pakistan and the country’s fight against militancy, have been enormous.
12,000
Lives, homes and incomes have been uprooted, while educational attainment for
virtually a whole generation of school ~going age in the affected areas of NWFP and
FATA has been jeopardized, or severely undermined.

In terms of the economic impact, the fall out on Pakistan has also been immense. As a
front line state in the global “War on Terror”, it is officially estimated that Pakistan has
been impacted to the extent of over US$ 43 billion between 2001 and 2010.

Table 1.4: Estimated Loss To Economy 2005 ~2009

Cumulative
Rs billion 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10
2005 ~10
2002 2003 2004 2005 2006 2007 2008 2009 *
2010
Direct Costs 67 78 83 109 114 262 712
Indirect Costs 192 223 278 376 564 707 2,340
Source: National Crisis Management Cell, Ministry of Interior
Total 259 301 361 484 678 969 3,052
In US$ bn 4.4 5.0 6.0 7.7 8.6 11.5 43.0
*: July~April Source: Finance Division, Government of
Pakistan

Since 2007 ~08, with the “war on terror” moving to a qualitatively different phase, with
the Pakistan army mobilizing and undertaking large scale military operations in the
country’s North West (in Malakand/Swat, and the Agencies of South Waziristan, Bajuar,
Mohmand, Khyber, and lately, Kurram and Orakzai), the negative effects on the
economy have greatly increased.

1 Source: National Crisis Management Cell, Ministry of Interior, Government of Pakistan

 Growth and Investment

A brief list of the areas where the economy has been impacted includes the following:

Decline in GDP growth

Reduction in Investment
Lost Exports
Damaged/destroyed Physical Infrastructure
Loss of Employment and Incomes

Diversion of Budgetary Resources, to military and security ~related spending

Cutbacks in Public Sector Development Spending
Capital, and Human Capital, Flight
Reduction in Capital + Wealth Stock
Exchange Rate Depreciation and Inflation

As an illustration of the magnitude of the direct costs, the additional expenditure

incurred on security ~ related and civil relief operations since July 2007 has amounted
to an estimated US$ 4 billion (2.4 percent of average GDP). 2 In addition, the cost of
the humanitarian crisis spawned by this conflict has been the displacement of over 3
million people, at its peak, resulting in a budgetaryoutlay of US$ 600 million for the
current fiscal year alone for relief and rehabilitation of the IDP population.

Largely as a result of the negative effects of the War on Terror, growth and
investment have stalled. Pakistan’s economy grew 1.2 percent in 2008/09, with
large ~scale manufacturing (LSM) contracting ~8.2 percent for the year. The five year
annual average rate of growth of the economy was 6.6 percent in the 2004 ~2008
period, while LSM output had expanded at an average of 12 percent. Hence, the
change in the five year average ~to ~2009 trough works out to over 4.5 percent of
GDP. Cumulatively, the loss of potential GDP for 2008 and 2009 is estimated at 7
percent (or equivalent to approximately US$ 11.7 billion).

Table 1.5: Change in GDP growth, Investment, LSM, FDI and Exports
2001 2002 2003 2004 2005 2006 2007 2008 2009 5 yr Chg.
Avg: [2009
2004~ vs
Real GDP Growth (fc) % 2.0 3.1 4.7 7.5 9.0 5.8 6.8 4.1 1.2 2008
6.6 5 Yr
~5.4

Fixed Investment % 15.8 15.5 15.3 15 17.5 20.5 20.9 20.4 18.1 18.9 ~0.8
Government GDP
% 5.7 4.2 4.0 4.0 4.3 4.8 5.6 5.4 4.9 4.8 0.1
Private GDP
% 10.2 11.3 11.3 10.9 13.1 15.7 15.4 15.0 13.2 14.0 ~0.8

Foreign Direct Investment GDP

US$b 0.3 0.5 0.8 0.9 1.5 3.5 5.1 5.2 3.7 3.3 0.5
(FDI) Scale Manufacturing
Large n
% 10.2 3.8 0.4 18.5 18.8 9.2 8.8 4.2 ~8.2 11.9 ~20.1

Private Sector Credit % ~0.5 12.1 12.8 34.3 34.4 23.5 17.3 16.5 0.7 25.2 ~24.5

Exports (FBS) US$ 9.20 9.14 11.16 12.31 14.39 16.45 17.0 19.1 14.8 15.8 ~1.1
bnSource: Federal Bureau of Statistics; State Bank of Pakistan; Economic
Adviser’s Wing, Ministry of Finance

The exportsector, with a contribution of 12 percent to GDP, and a substantial

employment base, has faced the brunt of the fall out. The adverse impact on the
exportsector has manifested itself in the following ways:
 Economic Survey 2009 ~10
2 Inclusive of original allocation and supplementary grants in budget 2009/10.
 Economic Survey 2009 ~10

Loss of export orders / trade diversion to competitors;

“Permanent”removal of Pakistan from global production and marketing chain
of international brands/large buying houses;
Relegation to low value ~added commodity products;
A substantial decline in price/unit value for products;
Increase in cost of doing business;
Loss of design and technological transfer;
A loss of entrepreneurial capital due to capital flight and brain drain;
Higher shipment, insurance and security costs
A reversal of trend towards greater economies of scale;
Loss of income, new investment and jobs;
The direct and indirect costs associated with being the front ~line state in the “war on
terror”have been, in sum, severe, widespread and, in most cases, protracted, with the
effects persisting for a fairly extended period. Indeed, Pakistan is more than likely to
face a significant degree of “permanent” welfare loss on account of diversion of
development spending to the security budget, capital flight and brain drain, and due
to trade diversion it has suffered since ‘9/11’.

1.2 ~g Cost of Energy Crisis

Total energy consumption declined 5.2 percent in 2009 versus 2008, with consumption
in the industrial sector falling by 11.7 percent. Electricity use in the industrial sector
fell by 6.5 percent, while gas consumption recorded a 2.6 percent decline (Fig ~6).
Cumulatively, since 2006 ~07, electricity consumption by the industrial sector has
declined 8.2 percent.

While the last available data pertains to fiscal year 2008 ~09, the impact of more recent
developments in the energy sector can be gauged from the widening deficit between
electricity supply and demand during 2009 ~10, which crossed 5,000 MW at its peak.
Fig ~6: Electricity & Gas Consumption In Industrial Sector

22.0
Electricity Gas
17.0

12.0

7.0

2.0

~3.0 2004~05 2005~06 2006~07 2007~08 2008~09

~8.0
Source: HDIP
 Economic Survey 2009 ~10

The effect of lower energy availability is estimated at the equivalent of 2.0 ~2.5
percent of GDP during 2009 ~10.

1.3 Longer Term Constraints: Improving Policy and Changing the Incentives
Framework
While the economy has had to navigate through difficult challenges in the short run,
a set of complex, inter ~related, and longer term, structural constraints to overall
growth continue to operate.

This is manifested in the following ways:

A stagnant or declining share of the manufacturing sector in the economy, as a

percentage of GDP, in new fixed investment, and in total employment (see Table
3.1).

A decline in size and “scale”, particularly in Manufacturing (Table 1.6).

Table 1.6: Manufacturing Companies by Paid Up Capital T

1990 1995 2000 2005 2009
No. of companies with paid ~up:
>Rs 500 million 1 13 6 11 2
~ 35 12 16 25 5
~100500million
100 lion 23 13 22 5
5 0
<50millionm i l 1 1 587 532 269 794 668
T ot a l 646 568 304 852 680
Source:
SECP

A faster increase in imports than exports. The Export ~Importratio had declined to
a low of 0.48x in 2007 as a result.

The expansion of the informal sector, relative to the formal partof the economy.
While this trend is suggested in a number of unreleased studies, it is clearly
evident from the following dynamic at work: the share of informal labour in the
economy has increased, from 72.8% in 2007 ~08, to 73.3% in 2008 ~09, as a
percent of total. Conversely, formal sector employment has declined over the
same period.

Put together, the above trends represent a worrying picture for scale and the level of
formality, in the economy. A large partof the problem relates to the incentives
framework in place.

The reliance on an overvalued exchange rate as an instrument of policy,

especially between 2004 and 2008,

Specifically for the viability of the domestic manufacturing sector, the Free Trade
Agreement (FTA) with China since 2007 is unlikely to have helped, given China’s
global dominance of manufactured products, especially in the low value added
segment.
 Growth and Investment
Pervasive mis ~declaration and under ~invoicing of imports, which according to
some estimates costs the economy anywhere between Rs 100 billion to Rs 300
billion in lost revenue alone, in conjunction with the rampant misuse of the Afghan
Transit Trade (ATT) facility, has undermined the viability and competitiveness of
the sector.
 Economic Survey 2009 ~10

Recent developments on this front, with the winding up of the PACCs system by
FBR, does not bode well for reducing leakages on account of weak administration of
Customs.

Weaknesses in the taxation system, including in terms of policy design, have set
perverse incentives for formality and hence, scale. This is evident from the following
table, which depicts strikingly how uneven the “playing field” is, especially in terms of
taxation, for the larger ~sized firms (mostly corporate entities).

Table 1.7: Incentives for de ~corporatization

Corporate Non ~Corporate
Listed Small
Unlisted AOP Individua
company
Tax Treatment:
"Headline" Tax rate 35 35 25 20 20
Workers Profit Participation Fund 5 5 No 5 No
(WPPF) Welfare Fund (WWF)
Workers 2 2 2 2 No
Distribution out of profits 5.8 5.8 No 7.3 No
(dividend)* 47.8 47.8 27.0 34.3 20.0
Source: A.F.
Ferguson

Other cost advantages to being a relatively smaller, informal player in the economy are
not captured in the Table. These include savings accruing via the elimination of the
regulatory “burden” (audits, inspections, filings, registration costs etc), and the use of
informal channels for gaining utility connections, as well as making lower payments for
consumption.

The loss of scale induced by the taxation system has seriously eroded the
competitiveness of the Large Scale Manufacturing (LSM) sector, in particular. In
addition, by encouraging informality, the taxation regime in place over the last many
years has plausibly reduced revenue collection compared to what would have been the
case counter ~factually.

1.4 Prospects for Growth

While the near term outlook for growth and investment has improved moderately, it is
likely to remain constrained due to a continuation of the difficult macroeconomic
environment. Nonetheless, the incipient growth recovery in the economy can gain
some more traction if momentum in important segments of the economy, large scale
manufacturing, services, and selectively in the exportsector, is reinforced and not
derailed or interrupted. With relatively low levels of capacity utilization in the economy
currently, a turnaround in investor confidence can unleash large productivity gains
even with low levels of fixed investment.

Despite an improvement in the growth performance for 2009 ~10, the economic
turnaround is still fragile, with non ~trivial risks stalking the outlook. Some of these
include:

A further deterioration of the internal security situation;

A continuation of energy shortages;

 Economic Survey 2009 ~10

• Thetipping of the world economy into a severe recession in the wake of the
Eurozone debt crisis,
which could hurt Pakistan’s exports as well as remittances on the one hand, but could
reduce
international prices of key commodities such as oil, on the other;

The magnitude, timing and nature of external assistance inflows will be an important
factor in reinforcing the nascent recovery. While the risk of pre ~emption of the
private sector’s credit requirements by government bank borrowing was obviated to a
large extent in 2009 ~10 by weak credit demand from the private sector, as well as
improved liquidity in the banking system, the threat of crowding out of private sector
demand for bank credit by government bank borrowing remains. In any case,
government borrowing for budgetary supporthad an unintended consequence: the
interest rate structure was pressured upward as a result. If and when external inflows
relieve this constraint, interest rates can begin to decline at the margin.

The longer term prospects for the economy are promising, given potential drivers
such as the size and dynamism of the Pakistani diaspora, the potential for unleashing
large productivity gains in agriculture, improvements in the economic environment by
a deepening of regional trade and investment links, and the harnessing of the “youth
bulge”.
 TABLE 1.

GROSS NATIONAL PRODUCT AT CONSTANT FACTOR COST OF 1999-2000

(Rs
million)
%
Sector 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2008- Change
2009-
F R P 09/ 10/
I. COMMODITY PROD. 2007- 2008-09
SECTOR (A+B) 2,041, 2,234, 2,348, 2,504, 2,535, 2,555, 2,646, 0.8 3.6
A. Agriculture (1 to 5) 661
964,85 671
1,027, 925
1,092, 569
1,137, 968
1,148, 948
1,195, 845
1,218, 4.0 2.0
1 Major Crops 3
327,05 403
385,05 098
370,00 037
398,61 851
373,18 031
400,48 873
399,72 7.3 -0.2
2 Minor Crops 7
124,12 8
125,99 5
126,45 7
125,24 8
138,88 6
136,60 9
135,00 -1.6 -1.2
3 Livestock 1
473,77 3
484,87 7
561,50 3
577,40 7
601,40 1
622,53 8
648,10 3.5 4.1
4 Fishery 1
13,611 6
13,691 0
16,540 0
19,080 8
20,834 1
21,319 6
21,626 2.3 1.4
5 Forestry 26,293 17,785 17,596 16,697 14,534 14,094 14,404 -3.0 2.2
B. Industry (6 to 9) 1,076, 1,207, 1,256, 1,367, 1,387, 1,360, 1,427, -1.9 4.9
6 Mining & Quarrying 808
111,47 268
122,62 827
128,28 532
132,25 117
138,04 917
137,70 972
135,41 -0.2 -1.7
7 Manufacturing 3
727,43 1
840,24 8
912,95 4
988,30 7
1,036, 7
997,96 1
1,049, -3.7 5.2
i Large Scale 9
492,63 3
590,75 3
639,58 1
695,48 101
723,62 6
664,40 569
693,35 -8.2 4.4
ii Small Scale 2
176,84 9
190,12 5
206,65 9
223,36 6
240,13 5
258,17 5
277,56 7.5 7.5
iii Slaughtering 1
57,966 1
59,363 6
66,712 5
69,447 9
72,336 3
75,388 2
78,652 4.2 4.3
8 Construction 82,818 98,190 108,19 134,53 127,07 112,88 130,20 -11.2 15.3
9 Electricity 5 6 6 4 3
and
Gas Distribution 155,07 146,21 107,39 112,44 85,893 112,36 112,78 30.8 0.4
II. SECTOR (10 to 8
2,173, 4
2,358, 1
2,511, 1
2,687, 2,847, 0
2,892, 9
3,023, 1.6 4.6
SER
10 Transport, Storage15) 947 559 551 140 044 089 923
461,27 477,17 496,07 519,48 539,29 554,11 578,96
& Communication 6 1 3 6 7 5 6 2.7 4.5
11 Wholesale & Re- 766,69 858,69 838,42 887,29 934,23 921,01 968,15
tail Trade 3 5 6 4 1 5 0 -1.4 5.1
12 Finance & Insurance 141,76 185,50 265,05 304,51 338,38 314,81 303,52 -7.0 -3.6
13 Ownership of 8 1 6 4 6 3 1
126,76 131,21 135,82 140,58 145,52 150,62 155,91
Dwellings 4 4 0 7 1 9 6 3.5 3.5
14 Public Admn. & 267,32 268,82 295,95 316,91 320,56 332,10 357,13
Defence 1 6 9 5 5 8 4 3.6 7.5
15 Social and Community 410,12 437,15 480,21 518,34 569,04 619,40 660,23
Services 5 2 7 4 4 9 6 8.9 6.6
16 GDP (fc) (I + II) 4,215, 4,593, 4,860, 5,191, 5,383, 5,448, 5,670, 1.2 4.1
17 Indirect Taxes 608
372,02 230
358,45 476
395,44 709
361,84 012
372,65 037
360,58 768
374,53 -3.2 3.9
18 Subsidies 9
53,488 5
69,889 0
72,545 1
75,602 1
190,28 4
41,085 1
26,434 -78.4 -35.7
19 GDP (mp) (16+17-18) 4,534, 4,881, 5,183, 5,477, 8
5,565, 5,767, 6,018, 3.6 4.4
20 Net Factor Income 149 796 371 948 375 536 865
112,83 193,71
from abroad 90,721 88,766 84,343 82,434 85,586 8 1 31.8 71.7
21 GNP (fc) (16+20) 4,306, 4,681, 4,944, 5,274, 5,468, 5,560, 5,864, 1.7 5.5
22 GNP (mp) (19 + 20) 329
4,624, 996
4,970, 819
5,267, 143
5,560, 598
5,650, 875
5,880, 479
6,212, 4.1 5.6
23 Population 870 562 714 382 961 374 576
(in million) 149.7 152.5 155.4 158.2 161.0 163.8 166.5 1.7 1.7
24 Per Capita
Income (fc-Rs) 28,776 30,696 31,826 33,345 33,973 33,957 35,218 0.0 3.7
25 Per Capita
Income (mp-Rs) 30,905 32,587 33,904 35,154 35,106 35,908 37,308 2.3 3.9
R : Revised F : Final Source: Federal Bureau of
Statistics P : Provisional
 TABLE 1.

SECTORAL SHARE IN GDP

(%)
Sector 1999- 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-
2000 F R 10
I. COMMODITY PROD. P
SECTOR 49.3 48.7 47.9 47.6 48.4 48.7 48.3 48.2 47.1 46.9 46.7
A. Agriculture 25.9 24.9 24.1 24.0 22.9 22.4 22.5 21.9 21.3 21.9 21.5
1 Major Crops 9.6 8.5 8.0 8.2 7.8 8.4 7.6 7.7 6.9 7.4 7.0
2 Minor Crops 3.5 3.3 3.1 3.0 2.9 2.7 2.6 2.4 2.6 2.5 2.4
3 Livestock 11.7 11.9 12.0 11.7 11.2 10.6 11.6 11.1 11.2 11.4 11.4
4 Fishery 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4
5 Forestry 0.7 0.7 0.7 0.7 0.6 0.4 0.4 0.3 0.3 0.3 0.3
B. Industry 23.3 23.8 23.7 23.6 25.5 26.3 25.9 26.3 25.8 25.0 25.2
6 Mining & Quarrying 2.3 2.4 2.4 2.5 2.6 2.7 2.6 2.5 2.6 2.5 2.4
7 Manufacturing 14.7 15.7 15.9 16.3 17.3 18.3 18.8 19.0 19.2 18.3 18.5
i Large Scale 9.5 10.3 10.4 10.6 11.7 12.9 13.2 13.4 13.4 12.2 12.2
ii Small Scale 5.2 5.4 5.6 5.6 4.2 4.1 4.3 4.3 4.5 4.7 4.9
iii Slaughtering - 2.9 3.0 - - 2.4 12.4 4.1 4.2 4.2 4.3
8 Construction 2.5 2.4 2.4 2.4 2.0 2.1 2.2 2.59 2.36 2.07 2.30
9 Electricity and
Gas Distribution 3.9 3.3 3.0 2.5 3.7 3.2 2.2 2.2 1.6 2.1 2.0
II. SERVICES SECTOR 50.7 51.3 52.1 52.4 51.6 51.3 51.7 51.8 52.9 53.1 53.3
10 Transport, Storage
& Communication 11.3 11.6 11.4 11.4 10.9 10.4 10.2 10.0 10.0 10.2 10.2
11 Wholesale & Re-
tail Trade 17.5 17.9 17.8 18.0 18.2 18.7 17.2 17.1 17.4 16.9 17.1
12 Finance & 3.7 3.1 3.5 3.3 3.4 4.0 5.5 5.9 6.3 5.8 5.4
Insurance
13 Ownership of 3.1 3.2 3.2 3.1 3.0 2.9 2.8 2.7 2.7 2.8 2.7
Dwellings
14 Public Admn. &
Defence 6.2 6.2 6.4 6.6 6.3 5.9 6.1 6.1 6.0 6.1 6.3
15 Social Services 9.0 9.3 9.8 9.9 9.7 9.5 9.9 10.0 10.6 11.4 11.6
16 GDP (fc) (I + II) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
R : Revised F: Source: Federal Bureau of
P : Provisional Final Statistics
 TABLE 1.

REAL GDP / GNP GROWTH RATES (AT CONSTANT FACTOR COST OF 1999-2000)
(%)
Sector 2000-01 2001- 2002-03 2003-04 2004-05 2005-06 2006- 2007-08 2008-09 2009-
02 07 F R 10
I. COMMODITY PROD. P
SECTOR 0.8 1.4 4.2 9.3 9.5 5.1 6.6 1.3 0.8 3.6

A. Agriculture -2.2 0.1 4.1 2.4 6.5 6.3 4.1 1.0 4.0 2.0
1 Major Crops -9.9 -2.5 6.8 1.7 17.7 -3.9 7.7 -6.4 7.3 -0.2

2 Minor Crops -3.2 -3.7 1.9 3.9 1.5 0.4 -1.0 10.9 -1.6 -1.2
3 Livestock 3.8 3.7 2.6 2.9 2.3 15.8 2.8 4.2 3.5 4.1
-
4 Fishery -3.0 12. 3.4 2.0 0.6 20.8 15.4 9.2 2.3 1.4
5 Forestry 9.1 -4.4 11.1 -3.2 - -1.1 -5.1 -13.0 -3.0 2.2
32.4
B. Industry 4.1 2.7 4.2 16.3 12.1 4.1 8.8 1.4 -1.9 4.9
6 Mining & Quarrying 5.5 5.7 6.6 15.6 10.0 4.6 3.1 4.4 -0.2 -1.7

7 Manufacturing 9.3 4.5 6.9 14.0 15.5 8.7 8.3 4.8 -3.7 5.2
i Large Scale 11.0 3.5 7.2 18.1 19.9 8.3 8.7 4.0 -8.2 4.4
ii Small Scale 6.2 6.3 6.3 - 7.5 8.7 8.1 7.5 7.5 7.5
20.0
iii .. .. .. .. 2.4 12.4 4.1 4.2 4.2 4.3
Slaughterin
0.5 1.6 4.0 - 18.6 10.2 24.3 -5.5 - 15.3
8 Construction
10.7 11.
9 Electricity and 2
Gas Distribution -13.7 -7.0 - 56.8 -5.7 - 4.7 -23.6 30.8 0.4
11.7 26.6
II. SERVICES SECTOR 3.1 4.8 5.2 5.8 8.5 6.5 7.0 6.0 1.6 4.6

10 Transport, Storage
& Communication

11 Wholesale & Re-

tail Trade 4.5 2.8 6.0 8.3 12.0 -2.4 5.8 5.3 -1.4 5.1

-15.1 17. -1.3 9.0 30.8 42.9 14.9 11.1 -7.0 -3.6
12 Finance & Insurance
2
13 Ownership of
3.8 3.5 3.3 3.5 3.5 3.5 3.5 3.5 3.5 3.5
Dwellings
14 Public Admn. &

Defence 2.2 6.9 7.7 3.2 0.6 10.1 7.1 1.2 3.6 7.5
15 Social Services 5.6 7.9 6.2 5.4 6.6 9.9 7.9 9.8 8.9 6.6

16 GDP (fc) 2.0 3.1 4.7 7.5 9.0 5.8 6.8 3.7 1.2 4.1
R : Revised P : Source: Federal Bureau of
.. : Not available Provisiona Statistics
 TABLE 1.

EXPENDITURE ON GROSS NATIONAL PRODUCT AT CONSTANT PRICES OF 1999-2000

(Rs
million)
% Change
Flows 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2008- 2009-
03 04 05 06 07 08
F 09
R 10
P 09/ 2008-
2007- 10/
08 09
1 Private Consumption
Expenditure 2,952, 3,251, 3,670, 3,708, 3,882, 3,779, 4,206, 4,371, 11.29 3.94
588 947 749 073 891 311 101 945
2 General Govt. Current
Consumption Expenditure 384,82 390,31 396,81 588,57 532,14 739,07 506,03 573,75 -31.53 13.38
5 9 8 6 7 1 6 5
3 Gross Domestic Fixed
Capital Formation 658,07 617,73 701,39 840,97 955,14 1,024, 908,85 890,30 -11.30 -2.04
0 1 2 7 0 696 6 0

4 Change in Stocks 71,051 73,703 79,085 82,934 87,647 89,046 92,281 96,305 3.63 4.36
5 Export of Goods and
Non-Factor Services 814,42 801,98 878,89 965,86 988,16 935,30 904,37 1,031, -3.31 14.06
5 2 6 3 4 3 5 533
6 Less Imports of Goods
and Non-Factor 657,98 601,55 845,14 1,003, 968,04 1,002, 850,11 944,97 -15.16 11.16
Services 3 9 4 052 1 052 1 0
7 Expenditure on GDP at
Market Prices 4,222, 4,534, 4,881, 5,183, 5,477, 5,565, 5,767, 6,018, 3.63 4.36
976 123 796 371 948 375 538 865
8 Plus Net Factor Income
from Rest of the World 127,05 90,721 88,750 84,343 82,434 85,586 112,83 193,71 31.84 71.67
0 8 1
9 Expenditure on GNP
at Market Prices 4,350, 4,624, 4,970, 5,267, 5,560, 5,650, 5,880, 6,212, 4.06 5.65
026 844 546 714 382 961 376 576
10 Less Indirect Taxes 355,32 372,02 358,45 395,44 361,84 372,65 360,58 374,53 -3.24 3.87
3 9 5 0 1 1 4 1
11 Plus Subsidies 54,451 53,488 69,889 72,545 75,602 190,28 41,085 26,434 -78.41 -35.66
8
12 GNP at Factor Cost 4,049, 4,306, 4,681, 4,944, 5,274, 5,468, 5,560, 5,864, 1.69 5.46
154 303 980 819 143 598 877 479
R : Revised P : Provisional Source: Federal Bureau of
Statistics F : Final
 TABLE 1.

GROSS NATIONAL PRODUCT AT CURRENT FACTOR COST

(Rs
million)
% Change
Sector 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2008- 2009-
s 04 05 06 07 08
F 09
R 10
P 09/
2007- 10/
2008-
1,164, 1,314, 1,457, 1,685, 2,017,1 2,603,8 3,016,5 08 09
1 Agriculture 29.1 15.9
Major Crops 751
411,83 234
497,55 222
464,27 240 671,374
546,41 81 26 1,101,6
974,190 65 45.1 13.1
Minor Crops 6
126,37 6
154,21 6
168,46 8 211,553
184,12 71
235,803 281,332 11.5 19.3
Livestock 2
578,21 8
621,17 1
766,44 1 1,051,4
881,80 1,304,6 1,537,5 24.1 17.8
Fishery 8
16,728 0
17,490 8
30,492 6
42,668 42
52,391 39
53,731 02
56,182 2.6 4.6
Forestry 31,597 23,800 27,545 30,227 30,421 35,463 39,878 16.6 12.4
2 Mining & Quarrying 208,29 182,05 219,68 252,54 301,469 346,810 346,256 15.0 -0.2
0
902,48 1
1,136, 2
1,370, 1 1,950,5
1,567, 2,067,4 2,369,0
3 Manufacturing 6.0 14.6
Large Scale 6
621,89 634
814,65 793
1,003, 313 22
1,149, 1,467,2 94 1,710,8
1,500,8 29 2.3 14.0
Small Scale 9
280,58 7
222,17 062
245,96 573 334,610
279,94 25 91 444,571
395,005 54 18.0 12.5
Slaughtering 7 6
99,801 2
121,76 3 148,687
137,79 171,598 213,604 15.4 24.5
4 Construction 115,49 153,33 9
179,88 7 260,340
225,23 294,990 308,425 13.3 4.6
5 Electricity and 7 3 5 9
Gas Distribution 190,71 187,26 153,33 169,51 145,874 222,249 246,086 52.4 10.7
6 Transport, Storage 3 7 8 9
& Communication 675,62 759,71 908,40 1,012, 1,155,8 1,630,2 1,894,1 41.0 16.2
7 Wholesale & Re- 3 1 9 206 73 78 88
tail Trade 896,35 1,093, 1,262, 1,441, 1,829,9 2,100,6 2,391,0 14.8 13.8
8 Finance & 7
165,23 114
236,25 001
364,32 786 556,679
447,27 44 61 667,550
625,471 58 12.4 6.7
9 Insurance
Ownership of 0 4 0 0
Dwellings 146,26 165,44 184,81 206,16 239,010 298,789 345,759 25.0 15.7
10 Public Admn. & 4 1 2 6
Defence 312,10 343,34 404,62 467,68 530,074 662,723 794,439 25.0 19.9
11 Social Services 5
473,21 8
551,18 8
653,43 5
760,13 934,618 1,228,6 1,464,1 31.5 19.2
12 GDP (fc) 1
5,250, 1
6,122, 7
7,158, 4
8,235, 9,921,5 65 13,843,
12,081, 34 21.8 14.6
13 Indirect Taxes 527
455,54 568
468,57 527
569,07 099
556,87 84
667,604 956 489
763,501 896,702 14.4 17.4
9 3 7
104,39 4
118,96
14 Subsidies 65,496 91,359 346,389 106,121 71,763 -69.4 -32.4
9 6
5,640, 6,499, 7,623, 8,673, 10,242, 12,739, 14,668,
15 GDP (mp) 580 782 205 007 799 336 428 24.4 15.1
16 Net Factor Income
from abroad 124,47 134,46 149,90 157,63 208,916 344,491 570,615 64.9 65.6
17 GNP (fc) 8
5,375, 1
6,257, 1
7,308, 1 10,130,
8,392, 12,426, 14,414, 22.7 16.0
005
5,765, 029
6,634, 428
7,773, 730 10,451,
8,830, 500 447 15,239,
13,083, 104
18 GNP (mp) 25.2 16.5
058 243 106 638 715 827 043
19 Population
(in million) 149.65 152.53 155.37 158.17 160.97 163.76 166.52 1.7 1.7
20 Per Capita
Income (fc-Rs) 35,917 41,022 47,039 53,061 62,934 75,882 86,561 20.6 14.1
21 Per Capita
Income (mp-Rs) 38,524 43,495 50,030 55,830 64,930 79,896 91,515 23.1 14.5
22 Per Capita
Income (mp-US $) 669 733 836 921 1,038 1,018 1,095 -2.0 7.6
23 GDP Deflator
Index 124.55 133.30 147.28 158.62 184.31 221.77 244.12 - -
Growth 7.74 7.02 10.49 7.70 16.20 20.32 10.08 - -
R : Revised P : Provisional Source: Federal Bureau of
Statistics F : Final
 TABLE 1.

EXPENDITURE ON GROSS NATIONAL PRODUCT AT CURRENT PRICES

(Rs
million)
% Change
Flows 2002- 2003- 2004- 2005- 2006- 2007-08 2008-09 2009-10 2008- 2009-
03 04 05 06 07 F R P 09/ 2008-
2007- 10/
08 09
1 Private Consumption
Expenditure 3,600, 4,184, 5,001, 5,720, 6,543, 7,835,3 10,254, 11,815, 30.88 15.22
963 717 499 225 843 10 625 289
2 General Government
Current
Consumption Expenditure 428,68 462,46 509,86 824,30 796,20 1,278,4 1,029,1 1,312,5 -19.50 27.53
9 2 4 0 4 31 56 20
3 Gross Domestic Fixed
Capital Formation 736,43 844,84 1,134, 1,565, 1,814, 2,094,7 2,210,9 2,196,9 5.55 -0.63
3 7 942 838 620 43 20 69
105,29 121,97 138,76 163,88 203,82 234,69
4 Change in Stocks 80,629 90,249 8 1 8 5 9 5 24.37 15.14
5 Export of Goods and Non-
Factor Services 815,15 883,70 1,019, 1,161, 1,230, 1,316,4 1,636,1 1,892,5 24.29 15.67
8 4 783 257 660 39 96 53
6 Less Imports of Goods
and
Non-Factor Services 786,22 825,39 1,271, 1,770, 1,851, 2,446,0 2,595,3 2,783,5 6.11 7.25
4 9 604 386 088 08 90 98
7 Expenditure on GDP at
Market Prices 4,875, 5,640, 6,499, 7,623, 8,673, 10,242, 12,739, 14,668, 24.37 15.14
648 580 782 205 007 800 336 428
8 Plus Net Factor Income
from
the rest of the world 151,81 124,47 134,46 149,90 157,63 208,91 344,49 570,61 64.89 65.64
2 8 1 1 1 6 1 5
9 Expenditure on GNP
at Market Prices 5,027, 5,765, 6,634, 7,773, 8,830, 10,451, 13,083, 15,239, 25.18 16.47
460 058 243 106 638 716 827 043
10 Less Indirect 403,22 455,54 468,57 569,07 556,87 667,60 763,50 896,70 14.36 17.45
Taxes 1 9 3 7 4 4 1 2
11 Plus Subsidies 61,791 65,496 91,359 104,39 118,96 346,38 106,12 71,763 -69.36 -32.38
9 6 9 1
12 GNP at Factor 4,686, 5,375, 6,257, 7,308, 8,392, 10,130, 12,426, 14,414, 22.66 16.00
Cost 030 005 029 428 730 501 447 104
R : Revised P : Provisional Source: Federal Bureau of
Statistics F : Final
 TABLE 1.
GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE, PUBLIC, AND GENERAL
GOVERNMENT SECTORS BY ECONOMIC ACTIVITY AT CURRENT MARKET PRICES
(Rs million)
% Change
Sector 2002-03 2003- 2004-05 2005-06 2006- 2007- 2008- 2009- 2008- 2009-
04 07 F 08 R 09 P 10 09/ 2008-
2007- 10/
GFCF (A+B+C) 736,433 844,83 1,134,94 1,565,8 1,814,6 2,094,7 2,210,9 2,196,9 08
5.5 09
-0.6
A. Private Sector 545,104 6 852,424
616,51 2 38
1,197,7 20
1,335,8 43
1,539,6 21
1,620,9 69
1,564,4 5.3 -3.5
B. Public Sector 104,051 4 129,482
103,53 40
162,02 49
172,69 47
204,87 82
212,87 27
218,43 3.9 2.6
C. General Govt. 87,278 6 153,036
124,78 2
206,07 7
306,07 3
350,22 9
377,06 2
414,11 7.7 9.8
Private & Public (A+B) 649,155 6 981,906
720,05 6
1,359,7 4
1,508,5 3
1,744,5 0
1,833,8 0
1,782,8 5.1 -2.8
SECTOR-WISE: 0 62 46 20 61 59
145,57 151,57 147,51 171,52 191,35
1. Agriculture 75,681 81,159 135,308 5 4 1 1 9 16.3 11.6
2. Mining and 136,39 144,50
Quarrying 77,430 18,651 33,378 49,569 75,559 94,753 8 1 44.0 5.9
3. Manufacturing 164,920 203,92 247,166 326,79 350,24 364,08 375,35 356,73 3.1 -5.0
(A+B)
A. Large Scale 136,066 9 195,655
164,57 7
261,02 8
276,13 8
271,84 0
254,83 6
223,33 -6.3 -12.4
B. Small Scale* 28,854 2 51,511
39,357 3
65,774 1
74,117 0
92,248 5
120,51 3
133,40 30.6 10.7
4. Construction 7,130 10,113 17,824 26,106 38,299 33,515 5
42,862 3
44,066 27.9 2.8
5. Electricity
& Gas 57,562 25,261 40,050 69,795 73,497 88,443 89,211 81,098 0.9 -9.1
6. Transport and 148,64 392,65 395,24 457,15 423,54 370,40
Communication 82,864 6 224,974 1 0 6 9 3 -7.4 -12.5
7. Wholesale and
Retail Trade 12,533 17,192 21,381 29,157 37,227 43,140 51,997 54,417 20.5 4.7
8. Finance & 152,03
Insurance 23,366 27,945 31,580 41,009 81,683 8 91,325 60,264 -39.9 -34.0
9. Ownership of 91,379 110,39 129,247 149,16 158,71 181,72 219,86 231,65 21.0 5.4
Dwellings
10. Services 56,290 76,7548 101,065 7
129,93 9
146,50 9
182,14 7
231,78 7
248,35 27.2 7.2
P : Provisional R: F : Final 6 0 7 1 8 (Cont
Revised
* : Slaughtering is included in small scale sector d.)
 TABLE 1.

GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE SECTOR BY

ECONOMIC ACTIVITY AT CURRENT MARKET PRICES
(Rs
% Change
Sector 2002-03 2003- 2004-05 2005-06 2006- 2007-08 2008- 2009- 2008- 2009-
04 07 F R 09 P 10 09/ 2008-09
2007- 10/
PRIVATE SECTOR 545,104 616,51 852,42 1,197,7 1,335,8 1,539,6 1,620,9 1,564,4 08
5.3 -3.5
4 4 40 49 47 82 27
135,08 143,53 151,34 147,38 171,38 191,12
1. Agriculture 74,293 81,050 6 8 0 1 3 9 16.3 11.5
2. Mining and
Quarrying 48,252 12,701 18,384 31,323 49,007 62,764 89,680 95,115 42.9 6.1
3. Manufacturing 163,520 200,52 244,95 320,50 346,57 362,82 371,09 352,85 2.3 -4.9
Large 134,666 1
161,16 9
193,44 1
254,72 4
272,45 4
270,57 8
250,58 0
219,44 -7.4 -12.4
Scale
Small 28,854 2
39,359 8
51,511 7
65,774 7
74,117 6
92,248 3
120,51 7
133,40 30.6 10.7
Scale*
4. Construction 4,178 6,608 13,418 19,248 24,262 19,091 5
28,205 3
27,601 47.7 -2.1
5. Electricity & Gas 26,417 3,039 11,612 32,372 29,633 32,843 31,438 25,538 -4.3 -18.8
6. Transport & 153,55 312,54 324,33 372,54 357,85 307,04
Communication 51,381 86,951 8 9 5 4 0 0 -3.9 -14.2
7. Wholesale and
Retail 12,533 17,192 21,381 29,157 37,227 43,140 51,997 54,417 20.5 4.7
Trade
8. Ownership of 110,39 129,24 149,16 158,71 181,72 219,86 231,65
Dwellings 91,379 8 7 7 9 9 7 7 21.0 5.4
9. Finance & 20,897 26,599 30,520 38,692 77,974 147,26 83,273 47,640 -43.5 -42.8
Insurance
10. Services 52,254 71,455 94,259 121,19 136,77 8
170,06 216,19 231,44 27.1 7.1
R : Revised P: F: 3 8 3 1 0 (Contd.)
Provisiona
* : Slaughtering is included in small scale Final
sector
 TABLE 1.
GROSS FIXED CAPITAL FORMATION (GFCF) IN PUBLIC AND GENERAL GOVERNMENT
SECTORS BY ECONOMIC ACTIVITY AT CURRENT MARKET PRICES
(Rs
% Change
Sector 2002-03 2003- 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2008- 2009-
04 F R P 09/
2007- 10/
2008-09
Public Sector and 08
228,32
General Govt. (A+B) 191,332 2 282,518 368,098 481,771 555,096 589,939 632,542 6.3 7.2
A. Public Sector 104,054 103,53 129,482 162,02 175,69 204,87 212,87 218,432 3.9 2.6
1. Agriculture 1,388 6
109 222 2
2,037 7
234 3
130 9
138 230 6.2 66.7
2. Mining and
Quarrying 29,178 5,950 14,994 18,246 29,552 31,989 46,718 49,386 46.0 5.7
3. Manufacturing 1,400 3,410 2,140 6,296 3,674 1,264 4,252 3,886 236.4 -8.6
4. Construction 2,952 3,505 4,406 6,858 14,037 14,424 14,657 16,465 1.6 12.3
5. Electricity & Gas 31,145 22,222 28,438 37,423 43,864 55,600 57,773 55,560 3.9 -3.8
6. Transport and
Communication 31,486 61,695 71,416 80,102 70,905 84,612 65,699 63,363 -22.4 -3.6
Railways 3,133 3,336 3,439 4,754 3,680 4,296 1,609 284 -62.5 -82.3
Post Office & PTCL 6,699 5,834 10,763 15,232 11,981 14,445 23,814 23,830 64.9 0.1
Others 21,654 52,525 57,214 60,116 55,244 65,871 40,276 39,249 -38.9 -2.5
7. Wholesale and
Retail Trade - - - - - - - - - -
8. Finance &
Insurance 2,469 1,346 1,060 2,317 3,709 4,770 8,052 12,624 68.8 56.8
9. Services 4,036 5,299 6,806 8,743 9,722 12,084 15,590 16,918 29.0 8.5
B. General Govt. 87,278 124,78 153,036 206,07 306,07 350,22 377,06 414,110 7.7 9.8
Federal 31,581 6
41,304 38,938 6
53,522 4
78,862 3
83,175 0
59,663 75,722 -28.3 26.9
Provincial 26,689 50,059 71,567 113,51 156,26 179,75 211,33 245,537 17.6 16.2
District Govt. 29,008 33,423 42,531 2
39,042 1
70,951 6
87,292 0
106,06 92,851 21.5 -12.5
R : Revised P: F : Final 7 Source: Federal Bureau of
- : Nil ..Provisional
: Not available Statistics
 TABLE 1.

GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE, PUBLIC AND GENERAL

GOVERNMENT SECTORS BY ECONOMIC ACTIVITY AT CONSTANT MARKET PRICES OF
1999-2000
(Rs million)
% Change
Sector 2002-03 2003- 2004- 2005-06 2006-07 2007- 2008-09 2009- 2008- 2009-
04 05 F 08 R P 10 09/
2007- 10/
2008-
GFCF (A+B+C) 658,070 617,7 701,39 840,97 955,14 1,024,6 908,85 890,30 08
-11.3 09
-2.0
A. Private Sector 485,849 31
447,2 2
521,32 6
635,89 1
691,55 96
756,03 6
672,01 1
637,99 -11.1 -5.1
12
72,76 6 4 0 5 5 0
B. Public Sector 91,475 75,153 81,809 85,153 88,743 76,150 76,752 -14.2 0.8
3
97,75 104,91 123,27 178,43 179,91 160,69 175,55
C. General Govt. 80,746 -10.7 9.3
Private & Public 6
519,9 3
596,47 3
717,70 8
776,70 8
844,77 1
748,16 9
714,74
577,324 -11.4 -4.5
(A+B) 75 9 3 3 8 5 2
Public & General 170,5 180,06 205,08 263,59 268,66 236,84 252,31
Govt. (B+C) 172,221 19 6 2 1 1 1 1 -11.8 6.5
SECTOR-WISE: 55,77 107,32 112,93 120,60
1. Agriculture 66,762 9 76,389 70,285 70,902 8 7 0 5.2 6.8
2. Mining and 12,23
Quarrying 66,738 2 17,482 22,021 32,557 36,104 44,252 45,680 22.6 3.2
3. Manufacturing 149,275 144,0 148,12 171,30 179,53 164,90 138,23 128,00 -16.2 -7.4
Large Scale 120,969 10
115,7 9
117,14 2
140,32 0
142,42 9
124,29 9
93,796 0
79,363 -24.5 -15.4
Small Scale* 28,306 00
28,31 7
30,982 0
30,982 4
37,106 9
40,610 44,443 48,637 9.4 9.4
4. Construction 6,606 0
7,919 13,155 19,378 26,805 21,137 19,784 19,139 -6.4 -3.3
5. Electricity 16,93
& Gas 50,119 4 21,659 32,056 32,750 34,764 29,710 26,439 -14.5 -11.0
6. Transport and 105,8 133,95 202,03 197,17 201,00 154,99 133,19
Communication 74,151 51 3 3 6 0 9 3 -22.9 -14.1
7. Wholesale and 13,76
Retail Trade 11,692 0 15,165 18,123 22,578 23,049 22,957 23,968 -0.4 4.4
8. Finance & 21,265 22,02 21,835 25,196 48,454 80,919 41,272 26,554 -49.0 -35.7
Insurance
9. Ownerships of 5
87,01 102,07
Dwellings 83,163 0 89,213 91,648 94,151 96,721 99,363 4 2.7 2.7
10. Services 49,996 54,45 59,499 65,661 71,800 78,847 84,651 89,094 7.4 5.2
R : Revised P: 5 (Cont
- : Not available Provisional
F : Final d.)
* : Slaughtering is in small scale
included sector
 TABLE 1.

GROSS FIXED CAPITAL FORMATION (GFCF) IN

PRIVATE SECTOR AT CONSTANT MARKET
PRICES OF 1999-2000
(Rs
% Change
Sector 2002-03 2003- 2004-05 2005- 2006-07 2007-08 2008-09 2009- 2007- 2008-
04 06 F R P 10 08/ 2007-08
2006- 09/
PRIVATE SECTOR 485,849 447,2 521,326 635,8 691,54 756,03 672,01 637,99 07
-11.1 -5.1
13 93 9 5 5 1
55,70 69,30 107,27 112,89 120,52
1. Agriculture 65,537 4 76,264 2 70,792 4 0 3 5.2 6.8
2. Mining and 13,91
Quarrying 41,589 8,330 9,629 5 21,116 23,915 29,095 30,068 21.7 3.3
3. Manufacturing 145,588 141,6 146,847 167,9 177,63 164,33 136,67 126,61 -16.8 -7.4
Large Scale 119,724 13 115,865
113,3 17
136,9 6
140,52 1
123,72 4
92,231 9
77,982 -25.5 -15.4
Small Scale* 25,864 03
28,31 30,982 35
30,98 9
37,107 1
40,610 44,443 48,637 9.4 9.4
4. Construction 3,871 0
5,175 9,903 2
14,28 16,981 12,040 13,018 11,988 8.1 -7.9
7
5. Electricity 14,86
& Gas 23,001 2,044 6,280 8 13,204 12,910 10,470 8,326 -18.9 -20.5
6. Transport & 61,91 160,8 161,80 163,79 130,95 110,40
Communication 45,979 8 91,431 18 3 8 7 9 -20.0 -15.7
7. Wholesale and 13,76 18,12
Retail Trade 11,692 0 15,165 3 22,578 23,049 22,957 23,968 -0.4 4.4
8. Ownership of 87,01 91,64 102,07
Dwellings 83,163 0 89,213 8 94,151 96,721 99,363 4 2.7 2.7
9. Finance & 20,96 23,77
Insurance 19,018 4 21,102 2 46,253 78,380 37,633 20,991 -52.0 -44.2
10. Services 46,411 50,69 55,492 61,24 67,035 73,617 78,958 83,025 7.3 5.2
R : Revised P: 5F : Final 3 (Contd.)
* : Slaughtering is Provisiona
included in small scale sector
 TABLE 1.8

GROSS FIXED CAPITAL FORMATION (GFCF) IN PUBLIC AND GENERAL

GOVERNMENT SECTORS AT CONSTANT MARKET PRICES OF 1999-2000
(Rs
% Change
Sector 2002-03 2003-04 2004-05 2005-062006-07 2007-08 2008- 2009-10 2007- 2008-
F 09 R P 08/ 2007-08
2006- 09/
Public and General 07
Government (A+B) 172,221 170,518 180,066 205,084 263,590 268,662 236,84 252,311 -11.8 6.5
1
91,47 72,76 75,15 81,81
A. Public Sector 6 2 3 0 85,152 88,744 76,150 76,751 -14.2 0.8
1. Agriculture 1,224 75 125 983 109 53 47 78 -11.3 66.0
2. Mining and 25,14
Quarrying 9 3,902 7,853 8,106 11,441 12,189 15,157 15,612 24.3 3.0
3. Manufacturing 1,245 2,397 1,282 3,385 1,895 578 1,565 1,381 170.8 -11.8
4. Construction 2,735 2,745 3,252 5,091 9,824 9,097 6,765 7,151 -25.6 5.7
5. Electricity & Gas 27,11 14,89 15,37 17,18 19,545 21,855 19,240 18,113 -12.0 -5.9
6. Transport and 8 0 9 8
28,17 43,93 42,52 41,21
Communication 3 3 2 5 35,373 37,202 24,043 22,785 -35.4 -5.2
Railways 2,804 2,376 2,048 2,446 1,836 1,889 589 102 -68.8 -82.7
Post Office & PTCL 5,992 4,154 6,408 7,837 5,977 6,351 8,715 8,569 37.2 -1.7
Others 19,37 37,40 34,06 30,93 27,560 28,962 14,739 14,114 -49.1 -4.2
7. Wholesale and 7 3 6 2
Retail Trade - - - - - - - - - -
8. Finance &
Insurance 2,247 1,061 733 1,424 2,200 2,539 3,639 5,562 43.3 52.8
9. Services 3,585 3,759 4,007 4,418 4,765 5,231 5,694 6,069 8.9 6.6
B. General Govt. 80,74 97,75 104,9 123,2 178,43 179,91 160,69 175,560 -10.7 9.3
Federal 5
29,21 32,356 13
26,69 74
32,01 8
45,976 8
42,729 1
25,427 32,102 -40.5 26.3
Provincial 7
24,69 39,217 4
49,06 7
67,90 91,098 92,345 90,062 104,094 -2.5 15.6
District Govt. 1
26,83 26,186 2
29,15 2
23,35 41,364 44,844 45,202 39,364 0.8 -12.9
R: Revised 7 F 3: 7 5 Source: Federal Bureau of
P: Provisional Final Statistics