Chapter 1.

GROWTH AND INVESTMENT

Pakistans economy continued to maintain solid pace of expansion for the fourth year in a row in the fiscal year 2005-06 despite facing headwinds from rising energy prices at $ 70-75 per barrel and the widespread damage caused by the earthquake of October 8, 2005. With economic growth at 6.6 percent in 2005-06, Pakistans economy has grown at an average rate of almost 7.0 percent per annum during the last four years and over 7.5 percent in the last three years, thus enabling it to join the exclusive club of the fastest growing economies of the Asian region (see Fig-1). The growth momentum that Pakistan sustained for the last four years is underpinned by dynamism in industry, agriculture and services, and the emergence of a new investment cycle supported by strong credit growth. The prerequisites for a sustained economic growth appear to have gained firm footing during the last four year.
Table-1.1:Regional Growth Performance Real GDP Growth (%) Region/Country 2003-04 2004-05 2005-06 World GDP 4.1 5.3 4.8 Euro Area 0.7 2.1 1.3 United States 2.7 4.2 3.5 Japan 1.8 2.3 2.7 Germany -0.2 1.6 0.9 Canada 2.0 2.9 2.9 Developing Countries 8.4 8.8 8.6 China 10.0 10.1 9.9 Hong Kong SAR 3.2 8.6 7.3 Korea 3.1 4.6 4.0 Singapore 2.9 8.7 6.4 Vietnam 7.3 7.7 7.5 ASEAN Indonesia 4.7 5.1 5.6 Malaysia 5.4 7.1 5.3 Thailand 7.0 6.2 4.4 Philippines 4.5 6.0 5.1 South Asia India 7.2 8.1 8.0 Bangladesh 5.8 5.9 5.8 Sri Lanka 6.0 5.4 5.9 Pakistan 7.5 8.6 6.6 Middle East Saudi Arabia 7.7 5.2 6.5 Kuwait 13.4 6.2 8.5 Iran 6.7 5.6 5.9 Egypt 3.1 4.1 5.0 Africa Algeria 6.9 5.2 5.3 Morocco 5.5 4.2 1.8 Tunisia 5.6 6.0 4.2 Nigeria 10.7 6.0 6.9 Kenya 2.8 4.3 4.7 South Africa 3.0 4.5 4.9 Source: World Economic Outlook (IMF), April 2006.

The current economic upturn is substantially different in three key respects from the occasional economic rebound of short duration that Pakistan witnessed in the 1990s. Firstly, consumer spending has been boosted by both structural and cyclical factors. Pakistani consumers are exerting their influence on domestic demand owing to rising incomes and benign domestic interest rate environment. Secondly, business expectations are more realistic. The gradual build-up of the investment upturn this time also suggests that investment recovery is likely to be more sustainable. Thirdly, the policy makers are likely to be more guarded in their response to rising inflationary pressures. The government and the State Bank of Pakistan (SBP) are likely to ensure that no heavy handed policy response that could derail the ongoing economic upturn is undertaken. The SBP has thus far avoided its sledgehammer policy response in the wake of rising inflation during the last two years and preferred to strike a balance between sustaining the growth momentum and containing inflation. This policy has yielded handsome dividends.

Economic Survey 2005-06 Real GDP grew strongly at 6.6 percent in 2005-06 Fig-1: Real GDPGrowth as against the revised estimates of 8.6 percent last year and 7.0 percent growth target for the year. 10 When viewed at the backdrop of rising and volatile 9 energy prices and the extensive damage caused 8 by the earthquake of October 8, 2005 Pakistans 7 growth performance for the year has been 6 impressive. Key drivers of this years growth have been service sectors and industry. Large-scale 5 manufacturing grew by 9.0 percent as against 15.6 4 percent of last year and 14.5 percent target for the 3 year, exhibiting signs of moderation on account of 2 higher capacity utilization on the one hand and 1 strong base effect along with several other factors 0 on the other hand. The services sector continued to perform strongly and grew by 8.8 percent. Construction too continued its strong showing, partly helped by activity in private housing market, spending on physical infrastructure, and reconstruction activities in earthquake affected areas. Consumer spending remained strong with real spending rising by 8.1 percent and investment spending maintaining its strong momentum at 10.3 percent increase in real investment. Agriculture, and particularly its crop sector could not perform up to the expectation and registered a contraction in growth. Livestock, a major component of agriculture, exhibited strong showing and pulled the overall growth in agriculture to 2.5 percent as against the target of 4.2 percent. Livestock has been the only saving grace as far as the performance of agriculture is concerned this year.
7.5 8.6 6.1 4.9 4.0 1.8 3.1 4.7

While solid pace of economic expansion this year was underpinned by the macroeconomic policies pursued by the government, Pakistan has also benefited from the buoyant global economic environment undeterred by the rising and volatile energy prices. The global economy continued its strong expansion. The expansion is becoming geographically more broad-based, and global growth is expected to remain strong over the near term. Inflation and inflationary expectations remained well contained but there is no room for complacency as there are downside risks, including those related to continued high and volatile oil prices, and abrupt tightening of global financial conditions, and a rise in protectionism. Where reforms have been undertaken, the benefits have been enhanced by an expanding world economy. In 200405, global growth, at 5.3 percent was the strongest in thirty years. Growth in 2005-06 though more moderate, was around 4.8 percent and similar strong growth is expected in 2006-07. The remarkable expansion we have seen in the past couple of years has been worldwide with almost every region of the world experiencing buoyant growth including South Asia. The United States and China remain the main engines of global economic growth, and that growth prospects in Japan and in some members of the euro area have steadily improved. The performance of many emerging economies and developing countries continue to be strong. As stated earlier, the United States continues to be a major driving force for global growth. Real GDP grew by 4.2 percent in 2004-05 and 3.5 percent in 2005-06 and is likely to moderate at around 3.3 percent in 2006-07. The buoyancy of the US economy has helped fuel growth in other regions. The pace of growth in emerging Asian especially but not only in China, India and Pakistan, has also contributed to strong global performance in the past few years and this, too looks set to continue with growth in Asian emerging market forecast to exceed 7.0 percent this year. There is also welcome news in those parts of the world where growth has been persistently sluggish. The Japanese economy appears better poised for a strong recovery than for many years, with deflation almost squeezed out of the system, and more buoyant consumer demand. And in the euro area, there are signs that in some countries, at least,

6.6

1980's

1990-I

1990-II

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06 P

Growth and Investment growth may be picking up, albeit slowly. South Asia, particularly India and Pakistan, appear to have overtaken ASEAN region in terms of their growth performance. Barring China, Hong Kong SAR, and Vietnam all the other Asian economies have fallen short to the South Asian giant (India and Pakistan) in terms of their growth performance. Middle Eastern and African countries showing strong to modest growth for the last few years. The performance of oil rich countries (Saudi Arabia, Iran and Kuwait) was expected to be strong in the Middle East region owing to massive influx of petro dollars. With the exception of Nigeria (another oil producing country) all other countries in African region showing a modest to weak growth performance (see Table-1.1). There are many reasons for the global economic expansion. A major one is the reduction in inflation rates worldwide. Over a long period high inflation inflicted great harm on many countries. But in recent years an extraordinary decline in inflation rates were observed worldwide. This has been a significant factor in the healthier rates of growth in many parts of the world. The low inflation environment has contributed significantly to the buoyancy of the global economy. The recent expansion has, after all, taken place against a backdrop, which might have been expected to hamper global growth. Continuing geopolitical uncertainty, a sharp rise in oil prices and continuing concern about global imbalances, thus far the collective impact of these concerns has been significantly less than many had predicted. The current outlook, both at the global and at the regional level, is good. But there are nevertheless, some important downside risks to which all policy makers need to be ready to respond. High oil prices are clearly at or close to the top of the list. So far, the rise in oil prices has been satisfactorily absorbed in most countries. This is partly a reflection of the fact that unlike the price rises of the 1970s the current increases have been demand rather than supply driven; and partly it reflects the fact that policy makers have taken to heart the lessons of the 1970s and have gradually reduced their dependence on oil to run the machines of their economies. Global imbalances continue to pose a risk to continuing global growth. The current account deficit of the United States now in excess of 6.0 percent of GDP, continue to increase and so, fuel concerns about sustainability. But the payment imbalances are part of a wider problem of imbalances in the global economy, with rapidly rising foreign exchange reserves in Asia, and sluggish growth in Europe and Japan. The main risk posed by these global imbalances is a disorderly resolution of the problem for example, an abrupt adjustment of exchange rates and US interest rates, with obvious implications for emerging market debt. Pakistans economy is undergoing structural shifts that are fueling rapid changes in consumer spending patterns. The ease of access to credit is boosting new entrepreneurship as well as consumers. In particular, the middle class is becoming an increasingly dominant force in the economic activity. Pakistans per capita real GDP has risen at a faster pace during the last three years (5.6% per annum on average in rupee terms) leading to a rise in average income of the people. Such increases in real per capita income have led to a sharp increase in consumer spending during the last three years. As opposed to an average annual increase of 1.4 percent during 2000-2003, real private consumption expenditure grew by 13.1 percent in 2004-05 and by 8.1 percent in 2005-06. Relatively slower growth in consumption in 2005-06 is mainly the result of inflationary pressure in the economy. The extraordinary strengthening of domestic demand during the last three years points to the following facts. First, the higher consumer spending feeding back into economic activity is likely to support the on-going growth momentum. Second, it suggests the emergence of a strong middle class with purchasing power which is a healthy sign for business expansion. Third, extra-ordinary rise in consumer spending over the last three years appears to have contributed, in part to building inflationary expectations in Pakistan. Having discussed the overall growth and consumer spending, it is imperative to look into the growth performance of the various components of Gross National Product for the outgoing fiscal year 2005-06. The performance of the various components of national income over the last two and a half decades is summarized in Table 1.2. Commodity Producing Sector (CPS) Commodity Producing Sector (CPS) was the main contributor to the strong growth of 8.6 percent in the last fiscal

Economic Survey 2005-06 year. This was spearheaded by the agriculture sector. During the fiscal year 2005-06, the mother nature was not as facilitative to agricultural growth as it was last year. Growth of value addition in CPS sector slowed to 4.3 percent in 2005-06 as against 9.2 percent last year. Both the important components of the commodity producing sector namely, agriculture and manufacturing performed less than their targets. Within the CPS, agriculture and manufacturing grew by 2.5 percent and 8.6 percent, respectively.
Table 1.2: Growth Performance of Components of Gross National Product (% Growth At Constant Factor Cost) 1980s 1990s 2002-03 2003-04 2004-05 2005-06 Commodity Producing Sector 6.5 4.6 4.3 9.2 9.2 4.3 1. Agriculture 4.4 4.3 2.3 6.7 2.5 5.4 - Major Crops 3.4 3.5 6.7 1.9 17.8 -3.6 - Minor Crops 4.1 4.6 1.8 4.0 3.0 1.6 - Livestock 5.3 6.4 3.0 2.5 2.3 8.0 - Fishing 7.3 3.6 3.4 2.0 2.2 1.9 - Forestry 6.4 -5.2 11.1 -3.2 -30.4 -9.7 2. Mining & Quarrying 9.5 2.7 6.6 15.6 9.6 3.8 3. Manufacturing 8.2 4.8 6.9 14.0 12.6 8.6 - Large Scale 8.2 3.6 7.2 18.1 15.6 9.0 - Small Scale * 8.4 7.8 7.5 7.5 7.5 9.3 4. Construction 4.7 2.6 4.0 -10.7 18.6 9.2 5. Electricity & Gas Distribution 10.1 7.4 -11.7 56.8 3.5 -8.4 Services Sector 6.6 4.6 5.2 5.9 8.0 8.8 6.2 5.1 4.3 3.5 3.6 7.2 6. Transport, Storage and

Communications
7. Wholesale & Retail Trade 8. Finance & Insurance 9. Ownership of Dwellings 10.Public Administration & Defence 11.Services 12.GDP (Constant Factor Cost) 13.GNP (Constant Factor Cost) * Slaughtering is included in small scale sector 7.2 6.0 7.9 5.4 6.5 6.1 5.5 3.7 5.9 8.4 11.1 9.9 5.8 -1.3 9.0 29.7 23.0 5.3 3.3 3.5 3.5 3.5 2.8 7.7 3.2 0.6 4.7 6.5 6.1 5.6 5.9 6.5 4.6 4.7 7.5 8.6 6.6 4.0 6.3 7.3 8.3 6.4 Source: Federal Bureau of Statistics and Economic Advisers Wing

i) Agriculture Agriculture Agriculture remains the single largest sector of the national economy. Although its share in GDP is declining since 2002-03, it still accounts for 21.6 percent of GDP and employed bulk of the total work force. Agriculture contributes to growth as a supplier of raw materials to industry as well as a market for industrial products and is the main source of foreign exchange. Approximately 66.7% of the countrys population live in rural areas and are directly or indirectly reliant on agriculture for their livelihood. The agriculture sector consists of crops, livestock, fishing and forestry sub-sectors. The crop sub-sector comprises major crops (primarily wheat, cotton, rice, sugarcane as well as maize and gram) and minor crops (such as pulses, potatoes, onions, chillies and garlic). The internal composition of the agriculture sector has changed over time and the share of crops sub-sector in agriculture has gradually declined from 65.1% in 1990-91 to 47.5% in 2005-06. By contrast, the share of livestock in the agriculture has increased from 29.8% to 49.6% in the same period. The contributions of fishing and forestry have been insignificant with only 1.3% and 1.6%, respectively. Growth in the agricultural sector was restrained during the outgoing fiscal year 2005-06. The performance of the agricultural sector remained less than satisfactory as it grew by only 2.5% with major crops and forestry registering negative growth of 3.6% and 9.7% respectively [See Table-1.2].

Growth and Investment The Governments long-term aim to improve the productivity of the agriculture has resulted in a number of incentives being offered to the sector in recent years. The Government announced a package of measures to boost agriculture which included proposals to line watercourses, reduce the price of fertilizers, provide over 600 bull-dozers for land development over three years, tax and duty relief for tractors and agricultural implements, loan and mark up relief and the extension of agricultural credit facilities. In order to address the countrys future water needs, existing dams are being upgraded and new dams are to be constructed. This includes upgrading the Mangla Dam, Gomal Zam Dam, Mirani Dam, Subak Zai Dam and Sadpara Dam. The agriculture sector was subjected to adverse weather conditions and grew by 2.5 percent as against the target of 4.2 percent and actual achievement of 6.7 percent last year. Two out of four major crops showed significant slippages and the major contribution to growth came alone from the livestock sector. The performance of various sub-sectors in detail is given in subsequent paragraphs. Major crops, Major crops, accounting for 35.2 percent of agricultural value added, depicted a negative growth of 3.6 percent as against impressive 17.8 percent growth last year. Besides measuring from a high base, value added in major crops registered a decline primarily on account of a 13.0 percent decrease in cotton production (12.4 million bales as against 14.3 million bales of last year) mainly on account of adverse weather conditions. Sugarcane is another major crop which registered negative growth of 6.2 percent (from47.2 million tones to 44.3 million tones). Rice and maize, the two major crops, registered a growth of 10.4 percent and 27.3 percent, respectively but failed to compensate the decline in two major crops. Wheat production marginally increased by 0.4 percent and stood at 21.7 million tons as against 21.6 million tons in 2005-06. It may be pointed out that these five crops account for over 90 percent of value addition in major crops. Minor crops, Minor crops, accounting for 12.3 percent of value added in overall agriculture, grew by 1.6 percent slight decline from last years growth of 3.0 percent. Production of pulses such as masoor, mung, and mash registered a sharp decline of 13.5%, 12.6%, and 9.8 percent respectively. Vegetables such as potatoes and onions exhibited mixed performance as the former registered a decline of 17.9 percent while the later posted a rise of 29.0 percent. Chillies, being an important minor crop, registered a sharp rise of 27.9 percent during the year under review. Livestock. Because livestock is less vulnerable to adverse weather conditions as compared to crops, it provides an alternative source of rural income. This sub-sector has grown by an average rate of 5.8% in the past ten years. In 2005-06 livestock accounted for 49.6% of agricultural value added and about 10.7% of GDP. The role of livestock in the rural economy is critical, with approximately 35 million people located in rural areas engaged in raising livestock, which generates approximately 30-40% of their income. Livestock includes: cattle, buffalos, sheep, goats, camels, horses, asses and mules. The livestock sector grew by 8.0 percent during 2005-06 as against 2.3 percent last year. Fisheries. The fisheries sector witnessed a growth of 2.1 percent against 2.0 percent last year. Components of fisheries such as marine fishing and inland fishing, contributed to an overall increase in value added in the fisheries sub-sector. Forestry. Forestry plays an important role in the Pakistani economy. Forests are important for the protection of land and water resources, particularly in prolonging the lives of dams, reservoirs and the irrigation network of canals. Forestry is also essential for maintaining a sustained supply of wood and wood products. Pakistan has only 5% of its total land area under forest which is very low as compared to other Asian countries. Of the 5% of total landmass that has forest cover, 85% is public forest, which includes 40% coniferous and scrub forests on the northern hills and mountains. The balance is made up of irrigated plantations and river rain forests along major rivers on the Indus plains, mangrove forests on the Indus delta and trees planted on farmlands. The value addition in forestry sector witnessed decline of 5.7 percent as against decline of 33.2 percent last year. This is the third year in a row when forestry is depicting negative growth.

Economic Survey 2005-06 Manufacturing Manufacturing is the second largest sector of the economy, accounting for 18.2% of GDP in 2005-06. Large-scale manufacturing, accounted for 69.9% of overall manufacturing, registered growth of 9.0% in 2005-06 against the target of 14.5% and last years achievement of 15.6%. Although large-scale manufacturing has lost some of the growth momentum but still the high levels of liquidity in the banking system, a stable exchange rate, comfortable foreign exchange reserves, stronger domestic demand for consumer durables, and high business confidence are supporting the growth momentum at high level of 9.0 percent. The main contributors to the 9.0% growth in 2005-06 were the textile and apparel group (7.0%), chemicals (14.8%), petroleum group (2.3%), tires and tubes group (12.2%), non-metallic mineral products (9.5%), engineering goods group (6.5%), electrical items group (11.8%), and automobile group (29.8%). The items that registered positive growth were cotton yarn (11.2%), vegetable ghee (13.2%), nitrogenous fertilizer (4.5%), phosphatic fertilizer (12.0%), cooking oil (17.6%), cement (9.8%), cigarettes (4.7%), jeeps and cars (29.9%), tractors (16.3%), L.C.Vs (29.3%), motorcycles/scooters (15.0%), paper and paper board (11.9%), T.V sets (12.2%), motor tyres (10.0%), refrigerators (11.3%) and caustic soda (5.9%). The individual items exhibiting negative growth include: sugar (2.4%), cotton ginned (10.9%) and billets (47.9%). Mining and Quarrying Pakistan has economically exploitable reserves of coal, rock salt, limestone and onyx marble, china clay, dolomite, fire clay, gypsum, silica sand and granite, as well as precious and semi-precious stones. Mineral deposits which may have sizeable reserves but require greater exploration including gold, copper, tin, silver, antimony, the platinum group of elements, tungsten, lead, bauxite and fluorite. The mining and quarrying sector grew by 3.8% in 2005-06 as against 9.6 percent growth last year. However, the sector contributed only 2.6% to GDP in 2005-06 which is slightly lower than last years 2.7 percent contribution. The main contribution to the growth of the mining and quarrying sector came from mining of aragonite marble, fire clay, limestone, coal and the extraction of natural gas which grew by 70.0%, 24.0%, 7.7%, 8.0% and 4.5%, respectively, in the first nine months of 2005-06. Because much of the countrys mining reserves exist in remote areas, infrastructure improvements are necessary to attract higher investment in this sector. Since 2000, the Government has implemented a mining policy under which imports of machinery have been allowed free of tariffs and restrictions on repatriation of profits by foreign investors have been removed. These measures have been successful in attracting foreign investment in the mining and quarrying sector. Services Sector The services sector in Pakistan consists primarily of wholesale and retail trade; transport, storage and communications; and financial and insurance services. In 2005-06, the services sector accounted for over 52.3% of GDP and absorbed approximately one-third of workforce in Pakistan. The services sector has been an important contributor to Pakistans economic growth over the past five years. The services sector grew by 5.9% in 2003-04, by 8.0% in 2004-05 and by 8.8% in 2005-06. Growth in the services sector in 2005-06 was primarily attributable to strong growth in the finance and insurance sector, better performance of wholesale and retail trade, as well as transport and the communications sector. Finance and insurance sector spearheaded the growth in the services sector and registered stellar growth of 23.0 percent during the current fiscal year 2005-06 which is slightly lower than 29.7 percent of last year. Value added in the wholesale and retail trade sector is based on the margins taken by traders on the transaction of commodities traded in the wholesale and retail market. In 2005-06, the gross value added in whole and retail trade increased by 9.9% over the previous year, compared to 11.1% growth in 2004-05. Value added in the transport, storage and communications sector is based primarily on the profits and losses of

Growth and Investment Pakistan Railways, Pakistan International Airlines and other airlines, Pakistan Posts & Courier Services, Pak Telecom and motor vehicles of different kinds on the road. In 2005-06, this sector grew by 7.1% from the previous year compared to 3.5% growth in 2004-05. The increase in the growth rate resulted primarily from strong consumer demand for mobile phones, internet services of Pak Telecom, and motor vehicles on road. Public administration and defense posted a growth of 4.7 percent while ownership of dwellings grew by 3.5 percent and social services sector maintained a growth rate of 6.5 percent. Sectoral Contribution to Real GDP Growth The economic growth is broad-based and is shared Table-1.3: Sectoral Contribution to the GDP growth (% Points) by all the major sectors of the economy. However, Sector 2002-03 2003-04 2004-05 2005-06 major contribution towards growth has come from Agriculture 1.04 0.55 1.54 0.55 the services sector which has emerged as a new Industry 1.01 3.84 2.91 1.54 - Manufacturing 1.10 2.28 2.17 1.53 growth power house for some time. The commodity Services 2.69 3.09 4.12 4.51 producing sectors (agriculture and industry) has 4.73 7.48 8.57 6.61 Real GDP (Fc) contributed one-third of the GDP growth and service Source: Federal Bureau of Statistics. sector contributed the remaining two-third to the real GDP growth of 6.6 percent. The CPS contributed 31.7 percent or 2.1 percentage point to this years growth while the remaining 68 percent or 4.5 percentage points contribution came from services sector. Within the CPS, agriculture contributed 0.55 percentage points or 8.4 percent to overall growth while industry contributed 1.54 percentage points or 23.3 percent (See table 1.3 and fig. 2 for details). The services sector is contributing bulk of growth for some time. The reliance on agriculture is minimizing with the passage of time. It is encouraging to note that the contribution of wholesale and retail trade is increasing. It has contributed 27.9 percent or 1.84 percentage points to GDP growth. This sector is a highly labour-intensive sector and this higher growth may have contributed to the rise in employment and income level of the people attached with the sector.
Fig-2: Contribution to the Real GDP Growth
2004-05
Other Industries 9% Agriculture 18%
Other Industries 0%

2005-06

Agriculture 8%

Services 48%

Manufacturing 25%
Services 69%

Manufact. 23%

Composition of the GDP The composition or the structure of the GDP has undergone considerable changes during the last three and a half decades (see Table 1.4 for details). The commodity producing sector (CPS) which accounted for almost 62 percent of the GDP in 1969-70, its share declined to almost 48 percent in 2005-06 - a decline of 14 percentage points. The decline in the share of CPS is fully accounted for by the equal rise in the share of services sector. Within the CPS, the contribution of agriculture is shrinking over the years. It has declined from almost 39 percent in 1969-70 to 21.6

Economic Survey 2005-06 percent in 2005-06 - a decline of 17 percentage points in three and a half decade. The share of agriculture in GDP has declined by 4.3 percentage points in the last 6 years alone. The exclusive concentration of the successive governments to four major crops, namely, wheat, cotton, sugarcane and rice and no or little effort to increase yield per acre or no policy support to diversification of agriculture sector are mainly responsible for the decline in the share of this sector. These four major crops only account for one - third of agricultural value added while rest of the two - third has received almost no attention from all the governments. Most importantly, livestock, which accounts for almost one - half of the agricultural value added, has been the major victim of the total neglect of the governments all along. As long as the government continues to concentrate on four major crops and neglect the rest, the contribution of agriculture to overall GDP will shrink rapidly in the next five to ten years because industry has been growing two to three times faster than agriculture and services sector has outpaced the growth in agriculture. During the last six years, the bulk of the impetus to growth is coming from the services and the manufacturing sector. The share of manufacturing in GDP has remained stagnant at around 16 percent for 33 years until 2002-03. Its contribution to GDP has surged only during the last three years - rising from 16.3 percent in 200203 to 18.2 percent in 2005-06. Almost two percentage points or 11.6 percent increase in just three years is an impressive performance. Within the services sector, almost all the components have raised their contribution over the last three and half decades but remained more or less stagnant since 2000-01. This simply suggests that the decline in the share of agriculture is fully compensated by the equal rise in the share of manufacturing with contribution from the services remaining more or less stagnant.
Table 1.4: Sectoral Share of Various Sectors in Gross Domestic Product (At Constant Factor Cost) (Percent) Commodity Producing Sector 1. Agriculture - Major Crops - Minor Crops - Livestock - Fishing - Forestry 2. Mining & Quarrying 3. Manufacturing - Large Scale - Small Scale 4. Construction 5. Electricity & Gas Distribution Services Sector 6. Transport, Storage and Communication 7. Wholesale and Retail Trade 8. Finance and Insurance 9. Ownership of Dwellings 10. Public Admn. & Defence 11. Other Services 12.GDP (Constant Factor Cost) P) Stands for provisional. 1969-70 61.6 38.9 23.4 4.2 10.6 0.5 0.1 0.5 16.0 12.5 3.5 4.2 2.0 38.4 6.3 13.8 1.8 3.4 6.4 6.7 100.0 2001-02 47.9 24.1 8.0 3.1 12.0 0.3 0.7 2.4 15.9 10.4 4.1 2.4 3.0 52.1 11.4 17.8 3.5 3.2 6.4 9.8 100.0 2002-03 2003-04 2004-05 2005-06 47.1 48.4 48.7 47.7 24.0 22.9 22.5 21.6 8.2 7.8 8.4 7.6 3.0 2.9 2.8 2.7 11.8 11.2 10.6 10.7 0.3 0.3 0.3 0.3 0.7 0.6 0.4 0.3 2.5 2.6 2.7 2.6 16.3 17.3 17.9 18.2 10.6 11.7 12.4 12.7 4.2 4.2 4.2 4.3 2.4 2.0 2.1 2.2 2.4 3.7 3.5 3.0 52.3 51.6 51.3 52.3 11.4 10.9 10.4 10.5 18.0 18.2 18.6 19.2 3.3 3.4 4.0 4.6 3.1 3.0 2.9 2.8 6.6 6.3 5.9 5.8 9.9 9.7 9.5 9.5 100.0 100.0 100.0 100.0 Source: Economic Advisers Wing, Finance Division

Growth and Investment Per Capita Income

Fig-4: Per Capita Income ($)

Per capita income is one of the main indicators of 860 847.0 820 economic well-being. It is historically regarded as a 780 simple reflection of the average level of prosperity in 742.0 740 the country or average standards of living of the 669.0 700 people in a country. Per capita income, defined as 660 Gross National Product at market price in dollar term 620 582.0 divided by the countrys population, grew at a much 580 slower pace of 1.4 percent per annum in the 1990s, 526.0 503.0 540 501.0 due mainly to slower economic growth, declining 500 trend in workers remittances and fast depreciating 460 exchange rate. The pendulum swung to other 420 extreme during the last few years and the per capita 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 income grew at a tremendous pace. The per capita income in dollar term has grown at an average rate of 13.6 percent per annum during the last three years rising from $ 669 in 2003-04 to $ 742 in 2004-05 and further to $ 847 in 2005-06. The main factor responsible for the sharp rise in per capita income include acceleration in real GDP growth, stable or even appreciation in exchange rate and four fold increase in the inflows of workers remittances. Per capita income in dollar term rose from $ 742 last year to $ 847 in 2005-06, depicting an increase of 13.6 percent. Fig. 4 shows the improvement in per capita income during the last six years. Investment and Savings Fixed investment is the key to sustain growth momentum. Fixed investment grew by 24.7 percent on average during the last three years (2003-06) while private investment grew by 24.6 percent per annum during this period. In the fiscal year 2005-06, gross fixed capital formation or domestic fixed investment grew by 30.7 percent as against 28.6 percent last year. The composition of investment between private and public sector has changed considerably during the last three years. Private sector investment grew by 31.6 percent this year as against 29.1 percent increase in last year. Public sector investment has also increased by 24.9 percent per annum during the last three years and 28.2 percent during the current fiscal year. Public sector investment has created spillovers for private sector investment through massive rise in public sector development program and infrastructure investment. In other words, the growth in domestic investment in the current year was largely a public-private partnership based growth where both sectors are working in tandem to augment growth spree in the economy. The government has vacated space for the private sector in the past but now the government is active player in infrastructure building and social sector development.
Table 1.5: Structure of Savings and Investment (As Percent of GDP) Description 2000-01 2001-02 2002-03 Total Investment 17.2 16.8 16.9 Changes in Stock 1.4 1.3 1.7 Gross Fixed Investment 15.8 15.5 15.3 - Public Investment 5.7 4.2 4.0 - Private Investment 10.2 11.3 11.3 Foreign Savings 0.7 -1.9 -3.8 National Savings 16.5 18.6 20.8 Domestic Savings 17.8 18.1 17.6 P: Provisional 2003-04 16.6 1.6 15.0 4.0 10.9 -1.3 17.9 15.7 2004-05 2005-06 (P) 18.1 20.0 1.6 1.6 16.5 18.4 4.4 4.8 12.1 13.6 1.6 3.7 16.5 16.4 14.5 14.4 Source: Economic Advisers Wing

Like growth, private sector investment was highly broad-based. Major growth in investment by private sector is witnessed in agriculture (15.3%), manufacturing (14.4%), mining and quarrying (45.5%), construction (9.5%),

Economic Survey 2005-06 transport and communication (20.2%), and wholesale and retail trade (424.5%). As a result of the sharp rise in private sector investment, its share in domestic fixed investment rose by 9.6 percentage points over last six years, that is, from 64.2 percent to 73.8 percent. Public sector investment lost as much ground in favour of private sector. All sectors of the economy witnessed double digit increase in investment. In the public sector investment, only post office and telegraph witnessed negative growth. On the other hand, public sector investment rose sharply by 185.5 percent in electricity and gas distribution. General government investment was however, up by 11.6 percent in 200506. As percentage of GDP, total investment provisionally estimated at 20.0 percent as against 18.1 percent last year. Fixed investment as percentage of GDP is estimated at 18.4 percent as against 16.5 percent last year. Both public sector investment and private sector investment as percentage of GDP have increased to 4.8 percent and 13.6 percent respectively, up from 4.4 percent and 12.1 percent last year. The contribution of national savings to the domestic investment is indirectly the mirror image of foreign savings required to meet investment demand. The requirement for foreign savings simply reflects the current account deficit in the balance of payments. National savings were not able to finance the demand for the growing economy and the recourse to foreign savings to the extent of 3.7 percent of GDP reflects the saving-investment gap. National savings as percentage of GDP stood at 16.4 percent in 2005-06 fractionally lower than last years level of 16.5 percent.

10

TABLE 1.1 GROSS NATIONAL PRODUCT AT CONSTANT FACTOR COST OF 1999-2000

(Rs million) % Change 2005-06/ 2004-05 4.3 2.5 -3.6 1.6 8.0 1.9 -9.7 5.9 3.8 8.6 9.0 9.3 2.4 9.2 -8.4 8.8 7.2 9.9 23.0 3.5 4.7 6.5 6.6 0.0 0.0 6.2 -3.6 6.4 6.0 1.9 4.5

Sectors COMMODITY PROD. SECTOR 1 Agriculture Major Crops Minor Crops Livestock Fishing Forestry A1. INDUSTRIAL SECTOR 2 Mining & Quarrying 3 Manfacturing Large Scale Small & Household Slaughtering 4 Construction 5 Electricity and Gas Distrubution SERVICES SECTOR 6 Transport, Storage & Communication 7 Wholesale & Retail Trade 8 Finance & Insurance 9 Ownership of Dwellings 10 Public Admn. & Defence 11 Services 12 GDP (fc) 13 Indirect Taxes 14 Subsidies 15 GDP(mp) 16 Net Factor Income from abroad 17 GNP(fc) 18 19 GNP (mp) Population (in million) 20 Per Capita Income(fc-Rs) 21 Per Capita Income(mp-Rs) R: Revised

1999-00 1,754,474 923,609 342,200 125,679 417,120 15,163 23,447 830,865 81,052 522,801 338,602 132,369 51,830 87,386 139,626 1,807,546 400,983 621,842 132,454 110,425 220,291 321,551 3,562,020 295,815 31,724 3,826,111 -47,956 3,514,064 3,778,155 137.5 25,551 27,471

2000-01 1,768,695 903,499 308,474 121,673 433,066 14,715 25,571 865,196 85,528 571,357 375,687 142,310 53,360 87,846 120,465 1,863,396 422,195 649,564 112,455 114,593 225,152 339,437 3,632,091 301,920 32,050 3,901,961 -47,285 3,584,806 3,854,676 140.4 25,540 27,463

2001-02 1,792,972 904,433 300,911 117,217 448,968 12,901 24,436 888,539 90,431 596,841 388,859 152,997 54,985 89,241 112,026 1,952,146 427,296 667,615 131,761 118,604 240,585 366,285 3,745,118 312,886 30,227 4,027,777 22,594 3,767,712 4,050,371 143.2 26,316 28,291

2002-03 1,869,406 943,223 321,038 119,359 462,330 13,346 27,150 926,183 96,418 638,044 416,955 164,487 56,602 92,789 98,932 2,052,901 445,552 707,145 130,081 122,466 259,148 388,509 3,922,307 355,323 54,451 4,223,179 127,050 4,049,357 4,350,229 146.8 27,594 29,644

2003-04 2,041,635 964,827 327,057 124,121 473,745 13,611 26,293 1,076,808 111,473 727,439 492,632 176,841 57,966 82,818 155,078 2,173,947 461,276 766,693 141,768 126,764 267,321 410,125 4,215,582 372,029 53,488 4,534,123 90,721 4,306,303 4,624,844 149.7 28,776 30,904

2004-05 R 2,229,509 1,029,845 385,119 127,822 484,684 13,916 18,304 1,199,664 122,178 818,809 569,325 190,121 59,363 98,190 160,487 2,347,552 477,701 851,744 183,900 131,214 268,826 434,167 4,577,061 383,827 63,954 4,896,934 88,766 4,665,827 4,985,700 152.5 30,590 32,687

2005-06 P 2,325,295 1,055,240 371,140 129,903 523,489 14,185 16,523 1,270,055 126,813 889,036 620,507 207,723 60,806 107,219 146,987 2,554,201 512,198 936,091 226,113 135,820 281,496 462,483 4,879,496 383,827 63,954 5,199,369 85,572 4,965,068 5,284,941 155.4 31,956

2004-05/ 2003-04 9.2 6.7 17.8 3.0 2.3 2.2 -30.4 11.4 9.6 12.6 15.6 7.5 2.4 18.6 3.5 8.0 3.6 11.1 29.7 3.5 0.6 5.9 8.6 3.2 19.6 8.0 -2.2 8.3 7.8 1.9 6.3

34,015 5.8 4.1 Source : Federal Bureau of Statistics

TABLE 1.2 SECTORAL SHARE IN GDP

Sector COMMODITY PROD. SECTOR 1. Agriculture Major Crops Minor Crops Livestock Fishing Forestry A1. INDUSTRIAL SECTOR 2. Mining & Quarrying 3. Manfacturing Large Scale Small & Household Slaughtering 4. Construction 5. Electricity and Gas Distrubution SERVICES SECTOR 6. Transport, Storage & Communication 7. Wholesale & Retail Trade 8. Finance & Insurance 9. Ownership of Dwellings 10. Public Admn. & Defence 11. Services 12. GDP (fc) R: Revised P: Provisional 1999-2000 49.3 25.9 9.6 3.5 11.7 0.4 0.7 23.3 2.3 14.7 9.5 3.7 1.5 2.5 3.9 50.7 11.3 17.5 3.7 3.1 6.2 9.0 100.0 2000-01 48.7 24.9 8.5 3.3 11.9 0.4 0.7 23.8 2.4 15.7 10.3 3.9 1.5 2.4 3.3 51.3 11.6 17.9 3.1 3.2 6.2 9.3 100.0 2001-02 47.9 24.1 8.0 3.1 12.0 0.3 0.7 23.7 2.4 15.9 10.4 4.1 1.5 2.4 3.0 52.1 11.4 17.8 3.5 3.2 6.4 9.8 100.0 2002-03 47.7 24.0 8.2 3.0 11.8 0.3 0.7 23.6 2.5 16.3 10.6 4.2 1.4 2.4 2.5 52.3 11.4 18.0 3.3 3.1 6.6 9.9 100.0 2003-04 R 48.4 22.9 7.8 2.9 11.2 0.3 0.6 25.5 2.6 17.3 11.7 4.2 1.4 2.0 3.7 51.6 10.9 18.2 3.4 3.0 2004-05 P 48.7 22.5 8.4 2.8 10.6 0.3 0.4 26.2 2.7 17.9 12.4 4.2 1.3 2.1 3.5 51.3 10.4 18.6 4.0 2.9 (%) 2005-06 P 47.7 21.6 7.6 2.7 10.7 0.3 0.3 26.0 2.6 18.2 12.7 4.3 1.2 2.2 3.0 52.3 10.5 19.2 4.6 2.8

6.3 5.9 5.8 9.7 9.5 9.5 100.0 100.0 100.0 Source: Federal Bureau of Statistics.

TABLE 1.3 REAL GDP / GNP GROWTH RATES

Sector COMMODITY PROD. SECTOR 1. Agriculture Major Crops Minor Crops Livestock Fishing Forestry A1. INDUSTRIAL SECTOR 2. Mining & Quarrying 3. Manfacturing Large Scale Small & Household Slaughtering 4. Construction 5. Electricity and Gas Distrubution SERVICES SECTOR 6. Transport, Storage & Communication 7. Wholesale & Retail Trade 8. Finance & Insurance 9. Ownership of Dwellings 10. Public Admn. & Defence 11. Services 12. GDP (fc) R: Revised P: Provisional 2000-01 0.8 -2.2 -9.9 -3.2 3.8 -3.0 9.1 4.1 5.5 9.3 11.0 7.5 3.0 0.5 -13.7 3.1 5.3 4.5 -15.1 3.8 2.2 5.6 2.0 2001-02 1.4 0.1 -2.5 -3.7 3.7 -12.3 -4.4 2.7 5.7 4.5 3.5 7.5 3.0 1.6 -7.0 4.8 1.2 2.8 17.2 3.5 6.9 7.9 3.1 2002-03 4.3 4.3 6.7 1.8 3.0 3.4 11.1 4.2 6.6 6.9 7.2 7.5 2.9 4.0 -11.7 5.2 4.3 5.9 -1.3 3.3 7.7 6.1 4.7 2003-04 9.2 2.3 1.9 4.0 2.5 2.0 -3.2 16.3 15.6 14.0 18.1 7.5 2.4 -10.7 56.8 5.9 3.5 8.4 9.0 3.5 2004-05 R 9.2 6.7 17.8 3.0 2.3 2.2 -30.4 11.4 9.6 12.6 15.6 7.5 2.4 18.6 3.5 8.0 3.6 11.1 29.7 3.5 (%) 2005-06 P 4.3 2.5 -3.6 1.6 8.0 1.9 -9.7 5.9 3.8 8.6 9.0 9.3 2.4 9.2 -8.4 8.8 7.2 9.9 23.0 3.5

3.2 0.6 4.7 5.6 5.9 6.5 7.5 8.6 6.6 Source: Federal Bureau of Statistics.

TABLE 1.4 EXPENDITURE ON GROSS NATIONAL PRODUCT AT CONSTANT PRICES OF 1999-2000

(Rs million) % Change 2004-05/ 2005-06/ 2003-04 2004-05 13.12 1.67 9.26 9.29 9.59 40.49 7.29 -2.15 8.09 4.83 10.33 5.99 12.94 23.91 6.23 -3.60

Flows Private Consumption Expenditure General Govt. Current Consumption Expenditure Gross Domestic Fixed Capital Formation Change in Stocks Export of Goods and Non-Factor Services Less Imports of Goods and Non-Factor Services Expenditure on GDP at Market Prices Plus Net Factor Income from the Rest of the World Expenditure on GNP at at Market Prices Less Indirect Taxes Plus Subsidies GNP at Factor Cost R: Revised P: Provisional

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05 R 3,678,649 396,818 674,954 80,552 878,886 845,118 4,864,741 88,766 4,953,507 358,455 69,889 4,664,941

2005-06 P 3,976,319 415,985 744,654 85,381 992,587 1,047,161 5,167,765 85,572

2,791,346 390,691 607,410 51,700 514,280 561,990 3,793,437 -47,957 3,745,480 295,815 31,724 3,481,389

2,856,556 312,070 634,423 58,138 576,936 574,130 3,863,993 -47,284 3,816,709 301,920 32,050 3,546,839

2,900,987 358,968 632,134 53,491 634,399 591,602 3,988,377 22,594 4,010,971 312,886 30,227 3,728,312

2,915,436 384,825 658,070 71,051 814,425 657,983 4,185,824 127,050 4,312,874 355,323 54,451 4,012,002

3,251,947 390,319 617,731 73,703 801,982 601,559 4,534,123 90,721 4,624,844 372,029 53,488 4,306,303

5,253,337 7.11 6.05 376,449 -3.65 5.02 87,357 30.66 24.99 4,964,245 8.33 6.42 Source: Federal Bureau of Statistics.

TABLE 1.5 GROSS NATIONAL PRODUCT AT CURRENT FACTOR COST

(Rs million) % Change 2004-05/ 2005-06/ 2003-04 2004-05 18.2 8.3 20.0 2.1 22.6 19.2 18.8 10.4 4.6 4.6 -25.6 9.0 -14.7 19.2 22.7 20.9 26.2 25.0 10.7 11.0 24.8 10.5 32.8 16.6 7.9 17.5 22.6 41.8 13.1 10.0 15.7 18.2 2.9 39.5 16.7 8.0 17.9 16.5 1.9 15.7 14.3 10.9 4.8 23.8 23.6 33.1 12.0 13.5 15.3 17.6 16.1 38.2 17.2 12.6 17.5 17.1 1.9 15.3 15.0 14.1

Sectors Agriculture Major Crops Minor Crops Livestock Fishing Forestry 2. Mining & Quarrying 3. Manfacturing Large Scale Small & Household Slaughtering 4. Construction 5. Electricity and Gas Distrubution 6. Transport, Storage & Communication 7. Wholesale & Retail Trade 8. Finance & Insurance 9. Ownership of Dwellings 10. Public Admn. & Defence 11. Services 12. GDP (fc) 13. Indirect Taxes 14. Subsidies 15. GDP(mp) 16. Net Factor Income from abroad 17. GNP(fc) 18. GNP (mp) 19. Population (in million) 20. Per Capita Income(fc-Rs) 21. Per Capita Income(mp-Rs) 22. Per Capita Income(mp-US $) 23. GDP Deflator Index Growth R: Revised P: Provisional 1.

1999-00 923,609 342,200 125,679 417,120 15,163 23,447 81,052 522,801 338,602 132,369 51,830 87,386 139,626 400,983 621,842 132,454 110,425 220,291 321,551 3,562,020 295,815 31,724 3,826,111 -47,956 3,514,064 3,778,155 137.53 25,551 27,471 526 100.00

2000-01 945,301 325,579 130,679 446,058 16,546 26,439 59,151 608,132 410,879 143,463 53,790 94,670 133,091 512,997 691,854 116,997 124,359 235,039 354,434 3,876,025 320,669 34,040 4,162,654 -54,482 3,821,543 4,108,172 140.36 27,227 29,269 501 106.72 6.72

2001-02 968,291 316,857 133,136 476,310 16,377 25,611 65,997 642,850 424,089 161,734 57,027 95,197 134,350 542,828 720,812 142,424 126,454 260,042 395,967 4,095,212 339,262 32,775 4,401,699 23,665 4,118,877 4,425,364 143.17 28,769 30,910 503 109.35 2.47

2002-03 1,059,316 370,117 130,450 512,976 16,625 29,148 84,238 725,434 481,374 244,060 0 100,880 120,556 609,929 785,776 144,989 135,139 285,854 429,301 4,481,412 403,221 61,791 4,822,842 151,812 4,633,224 4,974,654 146.75 31,572 33,899 579 114.25 4.49

2003-04 R 1,164,751 411,836 126,372 578,218 16,728 31,597 208,290 902,486 621,899 200,626 79,961 115,497 190,713 675,623 896,357 165,230 146,264 312,105 473,211 5,250,527 455,549 65,496 5,640,580 124,478 5,375,005 5,765,058 149.65 35,917 38,524 669 124.55 9.01

2004-05 R 1,377,147 494,266 154,932 686,939 17,490 23,520 177,658 1,107,077 785,100 222,176 99,801 153,333 205,814 793,680 1,098,758 234,215 165,441 343,348 547,418 6,203,889 468,573 91,359 6,581,103 134,490 6,338,379 6,715,593 152.53 41,555 44,028 742 135.54 8.83

2005-06 P 1,491,972 504,868 184,707 758,470 18,290 25,637 211,851 1,338,353 981,518 246,588 110,247 178,819 215,662 982,353 1,358,309 311,741 185,376 389,545 631,229 7,295,210 544,120 126,266 7,713,064 151,411 7,446,621 7,864,475 155.37 47,928 50,618 847

149.51 10.30 Source : Federal Bureau of Statistics

TABLE 1.6 EXPENDITURE ON GROSS NATIONAL PRODUCT AT CURRENT PRICES

(Rs million) % Change 2004-05/ 2005-06/ 2003-04 2004-05 22.61 10.25 28.62 16.67 15.40 54.05 16.67 8.04 22.31 14.31 30.73 17.20 17.26 48.26 17.20 12.58

Flows

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05 R 5,131,051 509,864 1,086,684 105,298 1,019,771 1,271,565 6,581,103 134,490 6,715,593 468,573 91,359 6,338,379

2005-06 P 6,275,651 582,832 1,420,595 123,409 1,195,770 1,885,193 7,713,064 151,411

Private Consumption Expenditure 2,851,346 3,163,874 General Government Current Consumption Expenditure 330,691 327,562 Gross Domestic Fixed Capital Formation 607,410 659,325 Change in Stocks 51,700 56,200 Export of Goods and NonFactor Services 514,280 617,148 Less Imports of Goods and Non-Factor Services 561,990 661,455 Expenditure on GDP at Market Prices 3,793,437 4,162,654 Plus Net Factor Income from the rest of the world -47,957 -54,482 Expenditure on GNP at Market Prices 3,745,480 4,108,172 Less Indirect Taxes 295,815 320,669 Plus Subsidies 31,724 34,040 GNP at Factor Cost 3,481,389 3,821,543 R: Revised P: Provisional Note: Private Consumption Expenditure has been taken as residual

3,278,905 388,446 680,373 58,000 677,855 681,880 4,401,699 23,665 4,425,364 339,262 32,775 4,118,877

3,548,157 428,689 736,433 80,629 815,158 786,224 4,822,842 151,812 4,974,654 403,221 61,791 4,633,224

4,184,717 462,462 844,847 90,249 883,704 825,399 5,640,580 124,478 5,765,058 455,549 65,496 5,375,005

7,864,475 16.49 17.11 544,120 2.86 16.12 126,266 39.49 38.21 7,446,621 17.92 17.48 Source: Federal Bureau of Statistics.

TABLE 1.7 GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE, PUBLIC, AND GENERAL GOVERNMENT SECTORS BY ECONOMIC ACTIVITY AT CURRENT MARKET PRICES
Sector 1999-2000 2000-01 659,325 423,097 169,242 66,986 592,339 67,147 33,694 151,020 128,826 22,194 13,589 67,628 104,679 8,589 5,104 87,448 53,441 2001-02 680,373 496,464 113,523 70,386 609,987 69,604 48,996 168,055 143,005 25,050 15,163 56,865 86,360 10,375 10,158 87,833 56,579 2002-03 736,433 545,104 104,051 87,278 649,155 75,681 77,430 164,920 136,066 28,854 7,130 57,562 82,864 12,533 23,366 91,379 56,290 2003-04 844,836 616,514 103,536 124,786 720,050 81,159 18,651 203,929 164,572 39,357 10,113 25,261 148,646 17,192 27,945 110,398 76,754 2004-05 R 1,086,684 796,086 137,562 153,036 933,648 88,420 18,162 247,166 195,655 51,511 17,821 48,035 231,061 21,379 31,989 129,247 100,368 2005-06 P 1,420,595 1,048,035 201,803 170,757 1,249,838 101,939 24,822 288,784 221,359 67,425 19,971 74,833 305,335 112,142 42,284 151,055 128,673 2004-05/ 2003-04 28.6 29.1 32.9 22.6 29.7 8.9 -2.6 21.2 18.9 30.9 76.2 90.2 55.4 24.4 14.5 17.1 30.8 (Rs million) % Change 2005-06/ 2004-05 30.7 31.6 46.7 11.6 33.9 15.3 36.7 16.8 13.1 30.9 12.1 55.8 32.1 424.5 32.2 16.9 28.2 (Contd.)

GFCF (A+B+C) 607,410 394,749 A. Private Sector 146,912 B. Public Sector C. General Govt. 65,749 Private & Public (A+B) 541,661 SECTOR-WISE: 1. Agriculture 75,434 2. Mining and Quarrying 18,221 3. Manfacturing (A+B) 140,345 120,532 A. Large Scale 19,813 B. Small Scale* 4. Construction 15,117 5. Electricity & Gas 67,354 6. Transport and Communication 80,081 7. Wholesale and Retail Trade 7,111 8. Finance & Insurance 9,992 9. Ownership of Dwellings 77,973 9. Services 50,033 P: Provisional R: Revised * Slaughtering is included in small scale sector

TABLE 1.7 GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE SECTOR BY ECONOMIC ACTIVITY AT CURRENT MARKET PRICES
Sector 1999-2000 2000-01 423,097 66,468 13,230 137,127 114,933 22,194 11,360 15,258 31,697 8,589 87,448 2,827 49,093 2001-02 496,464 65,636 26,710 166,657 141,607 25,050 11,689 35,141 31,476 10,375 87,833 7,996 52,951 2002-03 545,104 74,293 48,252 163,520 134,666 28,854 4,178 26,417 51,381 12,533 91,379 20,897 52,254 2003-04 616,514 81,050 12,701 200,521 161,162 39,359 6,608 3,039 86,951 17,192 110,398 26,599 71,455 2004-05 R 796,086 88,304 12,272 245,026 193,515 51,511 13,415 9,108 153,067 21,379 129,247 30,660 93,608 2005-06 P 1,048,035 101,798 17,852 280,273 212,848 67,425 14,691 26,005 183,974 112,142 151,055 40,262 119,983 (Rs million) % Change 2004-05/ 2005-06/ 2003-04 2004-05 29.1 31.6 9.0 -3.4 22.2 20.1 30.9 103.0 199.7 76.0 24.4 17.1 15.3 31.0 15.3 45.5 14.4 10.0 30.9 9.5 185.5 20.2 424.5 16.9 31.3 28.2 (Contd.)

PRIVATE 394,749 SECTORS 1. Agriculture 72,513 2. Mining and Quarrying 13,108 3. Manufacturing 119,158 Large Scale 99,345 Small Scale* 19,813 4. Construction 12,373 5. Electricity & Gas 15,169 6. Transport & Communication 23,868 7. Wholesale and Retail Trade 7,111 8. Ownership of Dwellings 77,973 9. Finance & Insurance 6,312 10.Services 47,164 R: Revised P: Provisional * Slaughtering is included in small scale sector

TABLE 1.7 GROSS FIXED CAPITAL FORMATION (GFCF) IN PUBLIC AND GENERAL GOVERNMENT SECTORS BY ECONOMIC ACTIVITY AT CURRENT MARKET PRICES
Sector Public Sector and General Govt. (A+B) A. Public Sector 1. Agriculture 2. Mining and Quarrying 3. Manufacturing Large Scale Small Scale 4. Construction 5. Electricity & Gas 6. Transport and Communication Railways Post Office & PTC Others 7. Wholesale and Retail Trade 8. Finance & Insurance 9. Services B. General Govt. Federal Provincial Local Bodies R: Revised P: Provisional - Nil .. Not available 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 R 290,598 137,562 116 5,890 2,140 2,140 4,406 38,927 77,994 3,439 10,762 63,793 1,329 6,760 153,036 38,938 71,567 42,531 2005-06 P 372,560 201,803 141 6,970 8,511 8,511 5,280 48,828 121,361 4,458 4,220 112,683 (Rs million) % Change 2005-06/ 2004-05/ 2003-04 2004-05 27.3 32.9 6.4 -1.0 -37.2 -37.2 25.7 75.2 26.4 3.1 84.5 21.5 28.2 46.7 21.6 18.3 297.7 297.7 19.8 25.4 55.6 29.6 -60.8 76.6 -

212,661 146,912 2,921 5,113 21,187 21,187 2,744 52,185 56,213 369 27,438 28,406 3,680 2,869 65,749 24,980 31,763 9,006

236,228 169,242 680 20,463 13,893 13,893 2,229 52,370 72,982 2,473 31,239 39,270 2,277 4,348 66,986 24,029 31,371 11,586

183,909 113,523 3,968 22,285 1,398 1,398 3,474 21,724 54,884 5,376 26,440 23,068 2,162 3,628 70,386 29,657 17,729 23,000

191,329 104,051 1,388 29,178 1,400 1,400 2,952 31,145 31,483 3,133 6,699 21,654 2,469 4,036 87,278 31,581 26,689 29,008

228,322 103,536 109 5,950 3,410 3,410 3,505 22,222 61,695 3,336 5,834 52,525 1,346 5,299 124,786 41,304 50,059 33,423

2,022 -1.3 52.1 8,690 27.6 28.6 170,757 22.6 11.6 51,133 -5.7 31.3 74,856 43.0 4.6 44,768 27.3 5.3 Source: Federal Bureau of Statistics.

TABLE 1.8 GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE, PUBLIC AND GENERAL GOVERNMENT SECTORS BY ECONOMIC ACTIVITY AT CONSTANT MARKET PRICES OF 1999-2000
Sector 1999-2000 2000-01 634,422 406,003 163,175 65,244 228,419 64,965 32,610 142,550 120,952 21,598 12,283 65,582 101,023 8,369 4,957 84,926 51,915 2001-02 632,133 459,634 105,388 67,111 172,499 64,953 45,169 153,417 129,781 23,636 13,347 52,804 80,582 9,925 9,552 82,596 53,006 2002-03 658,070 485,849 91,475 80,746 172,221 66,762 66,738 149,275 120,969 28,306 6,606 50,119 74,151 11,692 21,265 83,163 49,996 2003-04 617,731 447,212 72,763 97,756 170,519 55,779 12,232 144,010 115,700 28,310 7,919 16,934 105,851 13,760 22,025 87,010 54,455 2004-05 R 674,954 489,968 80,073 104,913 184,986 49,918 9,512 148,169 117,187 30,982 13,153 25,978 137,577 15,163 22,118 89,364 59,089 2005-06 P 744,655 543,727 98,081 102,847 200,928 47,216 10,371 146,168 112,262 33,906 13,962 32,628 193,513 17,875 25,655 91,648 62,770 2004-05/ 2003-04 9.3 9.6 10.0 7.3 8.5 -10.5 -22.2 2.9 1.3 9.4 66.1 53.4 30.0 10.2 0.4 2.7 8.5 (Rs million) % Change 2005-06/ 2004-05 10.3 11.0 22.5 -2.0 8.6 -5.4 9.0 -1.4 -4.2 9.4 6.2 25.6 40.7 17.9 16.0 2.6 6.2 (..Contd.)

GFCF (A+B+C) 607,410 A. Private Sector 394,749 B. Public Sector 146,912 C. General Govt. 65,749 Private & Public (A+B) 212,661 SECTOR-WISE: 1. Agriculture 75,434 2. Mining and Quarrying 18,221 3. Manfacturing 140,345 Large Scale 120,532 Small Scale* 19,813 4. Construction 15,117 5. Electricity & Gas 67,354 6. Transport and Communication 80,081 7. Wholesale and Retail Trade 7,111 8. Finance & Insurance 9,992 9.Ownerships of Dwellings 77,973 10. Services 50,033 R: Revised P: Provisional - Not available * Slaughtering is included in small scale sector

TABLE 1.8 GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE SECTOR AT CONSTANT MARKET PRICES OF 1999-2000
Sector PRIVATE SECTOR 1999-2000 394,749 2000-01 406,003 64,307 12,805 129,506 107,908 21,598 10,268 14,796 30,590 8,369 84,926 2,745 47,691 2001-02 459,634 61,250 24,624 151,822 128,186 23,636 10,289 32,632 29,370 9,925 82,596 7,519 49,607 2002-03 485,849 65,537 41,589 145,588 119,724 25,864 3,871 23,001 45,979 11,692 83,163 19,018 46,411 2003-04 447,213 55,704 8,330 141,613 113,303 28,310 5,175 2,044 61,918 13,760 87,010 20,964 50,695 2004-05 R 489,967 49,853 6,427 146,887 115,905 30,982 9,901 4,926 91,138 15,163 89,364 21,199 55,109 2005-06 P 543,728 47,151 7,459 141,852 107,946 33,906 10,271 11,339 133,174 17,875 91,648 24,428 58,531 (Rs million) % Change 2004-05/ 2005-06/ 2003-04 2004-05 9.6 11.0 -10.5 -22.8 3.7 2.3 9.4 91.3 141.0 47.2 10.2 2.7 1.1 8.7 -5.4 16.1 -3.4 -6.9 9.4 3.7 130.2 46.1 17.9 2.6 15.2 6.2 (..Contd.)

1. Agriculture 72,513 2. Mining and Quarrying 13,108 3. Manufacturing 119,158 Large Scale 99,345 Small Scale* 19,813 4. Construction 12,373 5. Electricity & Gas 15,169 6. Transport & Communication 23,868 7. Wholesale and Retail Trade 7,111 8.Ownership of Dwellings 77,973 9. Finance & Insurance 6,312 10.Services 47,164 R: Revised P: Provisional - Nil * : Slaughtering is 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
Sector Public and General Government (A+B) A. Public Sector 1. Agriculture 2. Mining and Quarrying 3. Manufacturing 4. Construction 5. Electricity & Gas 6. Transport and Communication Railways Post Office & T&T Others 7. Wholesale and Retail Trade 8. Finance & Insurance 9. Services B. General Govt. Federal Provincial Local Bodies R: Revised P: Provisional 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 R 184,987 80,074 65 3,085 1,282 3,252 21,052 46,439 2,048 6,408 37,983 919 3,980 104,913 26,694 49,062 29,157 2005-06 P 200,926 98,079 65 2,912 4,316 3,691 21,290 60,339 2,216 2,098 56,025 (Rs million) % Change 2004-05/ 2005-06/ 2003-04 2004-05 8.5 10.0 -13.3 -20.9 -46.5 18.5 41.4 5.7 -13.8 54.3 1.6 8.6 22.5 0.0 -5.6 236.7 13.5 1.1 29.9 8.2 -67.3 47.5 -

212,661 146,912 2,921 5,113 21,187 2,744 52,185 56,213 369 27,438 28,406 3,680 2,869 65,749 24,980 31,763 9,006

228,419 163,175 658 19,805 13,044 2,015 50,785 70,433 2,387 30,148 37,898 2,211 4,224 65,244 23,404 30,555 11,285

172,499 105,388 3,703 20,545 1,265 3,058 20,173 51,212 5,016 24,671 21,525 2,033 3,399 67,111 28,277 16,904 21,930

172,221 91,476 1,224 25,149 1,245 2,735 27,118 28,173 2,804 5,992 19,377 2,247 3,585 80,745 29,217 24,691 26,837

170,518 72,762 75 3,902 2,397 2,745 14,890 43,933 2,376 4,154 37,403 1,061 3,759 97,756 32,357 39,216 26,183

1,227 -13.4 33.5 4,239 5.9 6.5 102,847 7.3 -2.0 30,797 -17.5 15.4 45,086 25.1 -8.1 26,964 11.4 -7.5 Source: Federal Bureau of Statistics.