Source: AFP

Pakistan recorded reduced growth of 5.8 percent during the fiscal year ending June 30 due to political turmoil at home and worldwide economic problems, the government said on Tuesday.

The figure was down from last year’s 6.8 percent growth and well short of this year’s 7.2 percent target, according to an official economic survey released a day before the national budget.

Releasing the report in Islamabad, acting finance minister Syed Naveed Qamar told a news conference it had been a “challenging year for Pakistan’s economy”.

“This year has seen several political and economic events, both on the domestic and external front, occurring unexpectedly. All these events have adversely impacted the performance of the economy during the year,” Qamar said.

The nuclear-armed Islamic republic of 160 million people has been rocked by a record number of suicide bombings over the past year coupled with political instability sparked by President Pervez Musharraf’s efforts to stay in power.

The country was plunged into crisis when opposition leader Benazir Bhutto was assassinated in a suicide bomb and gun attack at an election rally in December.

Her Pakistan People’s Party (PPP) went on to win the most seats in parliamentary elections in February, defeating allies of Musharraf.

But the stuttering economy after years of robust growth is a major issue facing the new government, which took power in March.

Tuesday’s economic report said the “new democratically elected government… took charge only 72 days back and inherited a complex macroeconomic situation.”

One of those problems is inflation, which averaged 10.3 percent during July 2007 to April 2008, against 7.9 percent in the comparable period last year, the report said.

Food inflation was particularly high at an estimated 15.0 percent, compared with 10.2 percent last year, echoing global concerns over the soaring price of dietary staples, such as rice and flour.

“Inflation is uncomfortably high in almost every corner of the world including Pakistan, creating extraordinary difficulties for the governments all over the world,” Qamar said.

Pakistan’s trade balance also worsened sharply from 17 billion dollars in the first 10 months of the fiscal year, as against 11 billion in the previous year, largely on petroleum products, the report said.

Per capita income however rose to 1085 dollars in 2007-8 compared with 926 dollars the previous year, an increase of 18.4 percent, it added.

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Tags: economic problems, fiscal year, official economic survey, political turmoil, reduced growth