Pakistan misses GDP growth target by 0.8 percent, sets 5.7 percent target for next year

ISLAMABAD: Pakistan achieved GDP growth of 4.7 percent in the fiscal year ending in June 2016, missing its target of 5.5 percent, the prime minister's office announced on Monday.

The government has set a growth target of 5.7 percent for the next fiscal year, according to a statement. Pakistan's financial year runs from July to June.

Nawaz Sharif's announcement comes ahead of Friday's presentation of his government's budget for the 2016-17 financial year.

The government has set a growth target of 3.5 percent for the agricultural sector, 7.7 percent for the industrial sector and 5.7 percent for the services sector for the coming year.

Friday's budget will include 1,675 billion rupees ($15.98 billion) in National Development Outlay, including 800 billion rupees ($7.63 billion) in federal funds and 875 billion rupees ($8.35 billion) in funds to the provinces, the statement said.

Pakistan's economy, despite its missed targets, grew at its highest rate for eight years this year. It remains plagued by chronic power shortages, poor infrastructure and flagging exports, however.

On May 21, Pakistan's central bank cut its key policy rate by 25 basis points to 5.75 percent, mainly over concern at the missed GDP growth target.

In April 2015, China announced it would invest $46 billion in the China Pakistan Economic Corridor, a project that would link western China to the Arabian Sea through Pakistan, creating a major new trade route.

"CPEC has the capacity for further contributing to GDP and will have far-reaching effect in consolidating the economic outlook of the country in years ahead," said Monday's statement.

($1 = 104.8000 Pakistani rupees)